AGENDA
JOINT MEETING OF THE COTATI CITY COUNCIL AND THE SUCCESSOR AGENCY TO THE
FORMER COTATI COMMUNITY REDEVELOPMENT AGENCY
City Council Chamber, City Hall 201 W. Sierra Avenue
Tuesday, February 20, 2024
6:00 PM STRATEGIC PLANNING SPECIAL MEETING
The Cotati City Council welcomes you to its meetings that are generally scheduled for the 2nd and 4th Tuesday of every month. Your interest and participation are encouraged and appreciated.
City Council meeting agendas, minutes and recordings are posted on the City’s Meeting Portal at www.cotaticity.org. For questions about the agenda or to receive the City Council agenda by e-mail, contact the Deputy City Clerk at [email protected] or 707-665-3622.
Cotati City Council Meetings will be conducted in person in the Council Chamber. To guarantee your ability to participate, you must attend the meeting in person. As a courtesy to the public, the City allows citizens the opportunity to view and offer public comments virtually through Zoom Online video conferencing platform. Technical difficulties may occur that make the Zoom platform unavailable. If Zoom is unavailable, the meeting will continue. Participants considering using Zoom should consider attending in person, if they desire to ensure their ability to view the meeting and offer public comments.
Subject to the above disclaimer, Zoom Online video conferencing is available to watch or listen in the following ways:
1. Using the following online livestream meeting portal link: https://cotaticity.primegov.com/public/portal
2. Cable T.V. Broadcast, local channel 28
Members of the public can participate in the meeting online by clicking the link below:
https://us02web.zoom.us/j/84570201334?pwd=eW90bVpwQ2NXKzRrUUZacE55L1M5Zz09 If you do not have the ability to join online, but would like to participate in the meeting, you can call into the meeting using your telephone, by dialing one of the following numbers and entering the meeting credentials:
Webinar ID: 845 7020 1334 Passcode: 370711
+1 (669) 900-6833 or +1 (346) 248-7799 or +1 (253) 215-8782 or +1 (301) 715-8592 or +1 (312) 626-6799 or +1 (929) 436-2866 Attendees may join the meeting any time after 5:45pm. Attendees will be muted until they are called upon for Public Comment. To make a public comment, use the “raise hand” icon on your smart device or desktop computer, or dial *9 if you are using just your telephone. Please listen carefully for the Mayor or City Clerk to address you by name (or phone number) and for the audible Zoom notification that you have been unmuted. Once you begin your public comment, your three minutes will begin.
If you would prefer to submit your public comment in writing, please email your comments to [email protected]. If you are commenting on a specific agenda item or items, please state the agenda item number(s) in the subject line of the email. All comments received via email will be provided to the City Council or Planning Commission in writing and included as part of the record of the meeting.
Notice is hereby given that Council may discuss and/or take action on any or all of the items listed on this agenda.
Any writings or documents provided to a majority of the Cotati City Council regarding any item on this agenda will be made available for inspection in the online Meeting Portal at www.cotaticity.org and in the City Manager’s office located at 201 West Sierra Avenue, Cotati, California, during the City’s posted business hours.
Disabled Accommodation: Upon request, this agenda will be made available in appropriate formats to persons with disabilities as required by Section 202 of the Americans with Disabilities Act of 1990. Any person with a disability who requires a modification or accommodation in order to participate in a meeting should contact the Deputy City Clerk at (707) 665-3622 at least 48 hours in advance of the meeting.
Rules of Decorum: To avoid distraction, the following meeting etiquette shall be enforced. • Silence electronic devices, including cell phones.
Cotati City Council Packet February 20, 2024
• Audience members are advised to keep conversations to a minimum or conduct them outside the building. • Photographs or video recordings using tri-pods or other means that would be distracting are to be taken only from the designated media area. • The Presiding Officer shall request that the audience withhold expressions of support or opposition for speakers in the interest of time and to encourage the full expression of differing views. (City Council Policy 2023-01 III.B.1.) Public Comment (Action items): Public comment on any one agenda item where the City Council will be taking some action is limited to no more than three (3) minutes per person. Action items are typically designated on the agenda title.
Public Comment (Non-Action items): Public comment on non- action agenda items shall be received during the designated portion of the agenda.
Comments shall be limited to no more than three (3) minutes for all non-action agenda items.
Waiver Warning: If you challenge decisions/direction of the City Council of the City of Cotati in court, you may be limited to raising only those issues you or someone else raised at public hearing(s) described in this agenda, or in written correspondence delivered to the City of Cotati at, or prior to, the public hearing(s).
City Council meetings are conducted according to City Council Policy 2023-01: City Council Rules. This policy available for inspection in the online Meeting Portal at www.cotaticity.org and in the City Manager’s office located at 201 West Sierra Avenue, Cotati, California, during the City’s posted business hours.
Those wishing to address the Council are asked to complete a speaker card and give it to the City Clerk. When you are called, step to the podium and state your name and address for the record. Persons wishing to address the Council are not required to identify themselves or complete a speaker card; (Gov’t. Code § 54953.3); however, this information assists the Mayor by ensuring that all persons wishing to address the Council are recognized and it assists the City Clerk in preparing the City Council meeting minutes.
1. CALL TO ORDER
2. LAND ACKNOWLEDGEMENT
The City of Cotati recognizes that we’re on the ancestral lands of the Coastal Miwok, who are the original caretakers of this area. We respectfully acknowledge the Indigenous peoples who have been stewarding and maintaining a relationship on this land as knowledge keepers for millennia. This acknowledgement does not take the place of authentic relationships with Indigenous communities but serves as a gesture of respect to the land we are on.
3. PLEDGE OF ALLEGIANCE
4. 5.
PUBLIC COMMENT
Pursuant to California Government Code Section 54954.3(a), members of the public wishing to address the Council may do so at the beginning of the special meeting, and such comments shall be limited to the special meeting topic.
STUDY SESSION
A. OVERVIEW OF FINANCIAL PROJECTIONS, POTENTIAL ISSUES AND OPPORTUNITIES FOR FISCAL YEAR 2024-25.
It is recommended the City Council receive a presentation and discuss the financial projections and anticipated issues and opportunities for fiscal year 2024-25.
B. REVIEW OF CITY COUNCIL GOALS AND OBJECTIVES FOR FISCAL YEAR 2024- 25 It is recommended that the City Council review the goals and objectives for the current fiscal year and provide direction, if any, on revisions for fiscal year 2024-25.
C. STUDY SESSION ON STRATEGIC PLANNING FOR FISCAL YEAR 2024-2025 Study Session on Strategic Planning for Fiscal Year 2024-2025. No action will be taken by the City Council.
Cotati City Council Packet February 20, 2024
D. DISCUSSION ON BI-ANNUAL BUDGETING FOR THE PERIOD OF FY 2025/26 - FY 2026/27
It is recommended that the City Council discuss the staff recommended shift to a two-year budget for fiscal years 2025/26 – 2026/27, provide feedback to staff on this recommendation, as well as what additional materials or planning meetings the City Council would like to see if the City transitioned to a two-year budget. No changes are proposed to the planned fiscal year 2024/25 budget.
6. ADJOURNMENT
Certification of Posting of the Notice: I declare under penalty of perjury that I am employed by the City of Cotati and that I posted this notice on the City’s website, bulletin boards of City Hall, Veterans’ Memorial Building and the SMART Train Depot, on or before February 16, 2024. /s/ Kevin Patterson, Deputy City Clerk
Cotati City Council
Agenda Staff Report
Item type: REGULAR AGENDA (ACTION)
To: City Council
Subject: OVERVIEW OF FINANCIAL PROJECTIONS, POTENTIAL
ISSUES AND OPPORTUNITIES FOR FISCAL YEAR 2024-25.
Date: February 20, 2024
Written by: Damien O'Bid, City Manager
Recommendation
It is recommended the City Council receive a presentation and discuss the financial projections and anticipated issues and opportunities for fiscal year 2024-25.
Background
On January 23, 2024, staff presented the long-range financial forecast. The staff report and forecast are attached for convenience during the study session.
Analysis/Discussion
Staff will provide a presentation summarizing the financial projections and anticpated issues and opportunities as we finish fiscal year 2023-24 and begin fiscal year 2024-25.
Financial Considerations
None.
Environmental Issues
Not applicable.
Cotati City Council
Agenda Staff Report
Item type: REGULAR AGENDA (ACTION)
To: City Council
Subject: PRESENTATION OF THE 2023-2033 GENERAL FUND LONG
RANGE FINANCIAL FORECAST
Date: January 23, 2024
Written by: Angela Courter, Director of Administrative Services Recommendation
It is recommended that the City Council review, discuss and accept the Fiscal Year 2024 to 2034 General Fund Long Range Financial Forecast.
Background
The City’s Long Range Financial Forecast (LRFF) was added to the City’s strategic objectives to help the City set out a path to revenue stability. Future updates to the LFRR are to be considered when new financial conditions arise, and plans are to be evaluated.
Analysis/Discussion
The Long-Range Financial Forecast (LRFF) provides a current and long-range financial assessment of revenues, expenditures, fund balance, and emergency reserves. The primary objective is to provide the City Council and the community with an early financial assessment and identify any significant issues that may need to be addressed in the budget development process. It is important to keep in mind that a forecast is not a budget.
The LRFF is a vehicle that allows us to peer into the future and make projections about what is likely to happen given certain assumptions. If future deficits are projected, then the forecast allows time to take corrective action to ensure finances remain stable. This analysis is centered on the City's General Fund because it is the primary operating budget for tax supported municipal services.
This document presents a potential range of financial outcomes based on available data and conditions and represents a review of the long-term financial future of the City of Cotati General Fund using a set of three revenue projections and a single expense forecast for a total of three scenarios. The LRFF presents three scenarios illustrating trends of the City’s expenditures and revenues over the next 10 years. The FY (Fiscal Year) 2023-24 adjusted Operating Budget is used as the base for all scenarios.
1. Baseline - The baseline revenue/expense growth estimate is based on a continuation of current economic performance. This forecast is like the actual revenue growth and expenditure change for the City over the last five years plus the adopted budget for the current fiscal year. If identifiable, Staff removed on-time large expenditures from projected expenditures and revenues.
2. Baseline with new hotel breaking ground in FY 2023-24 and opening in 2024-25. This development would then create increases in property tax, sales tax, and a new Transient Occupancy Tax (TOT). TOT is currently approved at 10% per City Code 3.12.030. To remain conservative, for the first year of operations we assumed a 50% occupancy rate with a minimal hotel rate at $200 for the 153-room proposed hotel. Subsequent years are expected to increase to 60% occupancy and then just increase 5% in revenues for each year thereafter.
3. Baseline with a Recession in 2026-27 - This scenario starts from the base assumptions in scenario 1 then estimates what an impact of an event like the great recession of 2008 would be on the City’s General Fund. Initial major impacts would hit the Sales Tax and Rents due to consumers' reduction in spending. For the fiscal year 2026/27 we projected a 35% decline followed by a 5% decrease in the subsequent year as consumers are slow to rebound their spending. After 2027/28 the projection forecasts regular growth of 2% thereafter. Secondary impacts would be shown on Property Tax, which has a lagging recession point. Other revenues including Other Tax Licenses and Franchises, Investment Earnings. And Other Revenue would follow Sales tax with immediate decline in some industries with shrinkage and closures of some businesses.
Financial Considerations
This action is to inform future financial considerations made by the City.
Environmental Issues
This action is exempt from the California Environmental Quality Act (CEQA) because it is not a project which has a potential for resulting in either a direct physical change in the environment, or a foreseeable indirect physical change in the environment, pursuant to CEQA Guideline section 15378.
City of Cotati
2024-2034
Updated January 23, 2024
Prepared By:
- Damien O’Bid, City Manager
- Angela Courter, Director of Administrative Services
- Neil Tomlinson, Senior Accountant
General Fund
Long Range Financial Forecast
City of Cotati
General Fund - Financial Forecast
FY 2022-23 to FY 2032-33
Contents
INTRODUCTION .............................................................................................................................3 City Overview ........................................................................................................................3 Objectives...............................................................................................................................3 FORECAST OVERVIEW.................................................................................................................4 Long Range Financial Forecast..............................................................................................4 Base Assumption....................................................................................................................4 Scenarios ................................................................................................................................4 Risks to the Forecast ..............................................................................................................6 GENERAL FUND FORECAST........................................................................................................8 REVENUES HISTORICAL AND PROJECTIONS .......................................................................10 EXPENDITURES HISTORICAL AND PROJECTIONS ..............................................................13 3 INTRODUCTION
City Overview
The City’s Fiscal Year (FY) 2023-24 adopted General Fund Operating Budget is $9.2 million with approximately 51 FTE budgeted positions. The City has the following departments to supply service to the community: City Manager, Administrative Services, Planning and Building, Public Works and Engineering, Police Services, and Recreation.
Objectives
The Long-Range Financial Forecast (LRFF) through FY2033/34 represents a continuing effort to analyze the City’s long-term fiscal condition based upon a reasonable set of economic and operational assumptions. It is an important management tool that can be used by both the City Council and the City Manager for identifying fiscal trends and issues which must be addressed to assure continued financial success. With early detection, financial trends identified as potential problems can be dealt with in a reasonable manner rather than waiting for a crisis to occur. The set of forecasts contained in this report is not a prediction of what will occur. The forecast is a snapshot in time and an approximate view of what could occur in the future if all the assumptions are realized.
As with any forecast or prediction, the assumptions and projections for the nearer years carry more certainty and confidence than for the years further into the future. The economic disruption of the past few years has made forecasting increasingly challenging as financial markets, cost of goods, and the economy overall has grown increasingly volatile along with various stimulus and assistance programs that have been implemented by the state and federal governments. It is important that the City continues to closely monitor economic conditions locally, statewide, and nationally and policies at state and national levels that will impact the City’s financial health. 4 FORECAST OVERVIEW
Long Range Financial Forecast
The Long-Range Financial Forecast (LRFF) provides a current and long-range financial assessment of revenues, expenditures, fund balance, and emergency reserves. The primary objective is to provide the City Council and the community with a financial forecast and identify any significant issues that may need to be addressed in the annual budget development process.
It is important to keep in mind that a forecast is not a budget. The LRFF is a vehicle that peers into the future and makes projections about what is likely to happen given certain assumptions. If future deficits are projected, then the forecast allows time to take corrective action to ensure finances remain stable.
This analysis is centered on the City's General Fund because it is the primary operating budget for tax supported municipal services. Long range financial forecasting assists the City in making decisions that lead to our ability to sustain the community’s core services. This document represents a review of the City of Cotati’s General Fund using three different scenarios.
Base Assumption
The LRFF scenarios illustrate trends of the City’s expenditures and revenues over the next 10 years. The FY 2023-24 adopted budget, is incorporated into the assumptions for the scenarios.
More detailed information about the assumptions is included in the Revenue and Assumptions and Expenditure and Assumptions sections of this report. It is important to note the historical LRFF figures for both revenues and expenditures are actual numbers. For forecasting purposes if nonreoccurring revenues and non-reoccurring expenditures could be identified, they were removed in determining forecasted growth/decline.
The City’s Annual Budget represents a total financing plan for all City operations and must be analyzed by its component parts to make any meaningful adjustments. Unlike a private holding company, the City cannot remove cash from any one enterprise operation to help support general tax funded operations. Although there is certainly some financial interdependence between the funds, such as internal service fund charges to allocate common costs, each fund represented in the budget must stand alone. When analyzing City operations, it is appropriate to look at the budget, department by department. However, when reviewing long range financial policies, it is best to look at the fund structure rather than the department structure. 5 Scenarios
The scenarios are modeled to provide insight into future financial capacity so that strategies can be developed to achieve long-term sustainability considering the City’s service objectives and financial challenges. They are intended to provide a high-level overview of the City’s financial situation utilizing various assumptions. Three scenarios are being presented; each scenario is described as follows:
1. Scenario 1 - Baseline Flat Growth- This scenario accounts for extrapolated trend fiscal growth using the actuals for the last five fiscal years and projecting the expected revenues for the future years. Flat fiscal growth is including the following assumptions:
Revenues:
• Sales Tax. The average increase is based on consultant projections for industry expectations for the first two years then on the historical average of change in Sales Tax receipts. • Property Tax, for the first increase based on consultant projections based on known property valuation changes, anticipated transfers of ownership and Prop 8 recaptures for the first three years and then increased using the historical average of change for each account. • Other Tax. This is primarily cannabis business tax. These revenues show a declining trend during fiscal years 2022/23 and 2023/24 as it normalized from the significant growth during covid. Overall, the revenues were forecast to increase gradually each year based on historical average revenue receipts.
• All other revenues are projected using conservative positive trend growth by each account from the adopted budget for 2023/24 forward. This does include some imbedded one-time revenues from private development fees (primarily building permit fees) as well as off-setting revenues that could partially fund staff costs (primarily Community Development and Engineering). • Transfers in and Other Sources. This includes contributions and are budgeted flat as they are based on (1) Transfers in for reimbursements to the General Fund from Prop 72 for police services, and (2) donations made to City operations primarily for Special Events and Recreation Scholarships.
Expenses: The baseline model includes a utilizes the 2023/24 adopted operating budget and applies the following assumptions for the Baseline Scenario:
• Salaries & Benefits (Including Health Insurance)– Changes were projected using projected trend amounts for each account and include expenses for wages, overtime, fringe benefits, insurance, and taxes, and CalPERS payments. The average increase per year for wages and salaries, insurance, and CalPERS is approximately 4.9%, 5.1% and 3.1% respectively. This estimate assumes no significant increases in Full Time Equivalent positions or changes in MOU’s. See more detail about the calculation for the pension expense for the unfunded liability below. • PERS Unfunded Liabilities. Based on the latest amortization schedules using PERS final report in September 2023. A presentation for the Pension Liability Review will be scheduled to further discuss policy compliance and estimates for CalPERS for strategic planning. • Debt Service. Includes new debt service for Streets and Pension Lease Debt. • Other Operating Expenses. to conservatively project expenditures, we have used trendline assumptions based on the last 5 years of actuals and the current budget year. On average the expenses increase at a rate of 4.5% per year.
6 2. Scenario 2 – Baseline with Hotel Development - This scenario uses the base Scenario 1 and then adds the possible impact of the Hotel Development being completed in 2024-25 and opening in FY 2025-26.
The hotel revenue model is based on consultant projections based on like hotels in the region. This scenario adds the following:
• Property Tax. Additional $44,000 in Property Tax revenues beginning in FY 2025-26 then increasing consistent with the base model thereafter.
• Sales Tax. Incremental increase of 1% beginning in FY 2024-25 then increasing consistent with the base model thereafter.
• Transient Occupancy Tax (TOT). Receipts initiating based on 50% occupancy rate in the first year, 60% occupancy in the second year, and then overall revenue (a function of price and occupancy) increasing by 5% per year for each subsequent year. It is important to note the following regarding Transient Occupancy Tax (TOT) assumptions:
o The approved TOT is set at 10% per City Code 3.12.030. o The proposed hotel is designed with 153 rooms.
• No assumptions around increases in expenses. Though it is reasonable to assume a new contract service for TOT audits would be initiated, the City does not have a cost estimate for these services, but it is not expected to be significantly material to this evaluation.
3. Scenario 3a – Recession in 2026/27 & Scenario 3b Recession – This scenario starts from the base assumptions in scenario one then estimates what an impact of a recession like that of the great recession of 2008 would be on the City’s General Fund. Assumptions for recession include the following:
Revenues:
• Sales Tax and Rents are considered initial revenue streams that are directly impacted by recession due to the pull back of consumers non-essential spending. Decrease of 35% in Fiscal Year 2026-27 followed by a 5% decrease in the year following Fiscal Year 2027-28, zero growth for the two fiscal years Fiscal Years 2028-29, and then back to regular growth of 2.0% thereafter. • Property Tax is a lagging recession point, so it still shows growth for fiscal year 2026/27, however in fiscal Year 2027/28 there is applied a 25% decrease followed by the 15% decrease in the subsequent, no growth for two more years and then average growth of 3.2% thereafter. • Other Tax, Licenses and Franchises, Investment Earnings, and Other Revenue could show immediate declines due to Cannabis Industry shrinkage and closures of business thus reducing of business licenses tax. This was estimated at a 15% decline in Fiscal Year 2026-27 followed by a 25% decrease in the year following Fiscal Year 2027-28, zero growth for the two fiscal years Fiscal Years 2028-29, and then back to regular growth of 1.0% thereafter.
Expenses: The model shows the maintenance of most expenses used in the baseline as if we were going to try and continue operations, but with the decline in revenues. Some immediate changes that were assumed include:
• Capital Outlay, which is primarily used to fund the vehicle replacement fund would cut in half the contributions for fiscal year 2026-27 and then completely discontinue providing contributions in Fiscal Years 2028 through 2034.
• Other Expenses are cut in half with immediate cuts to travel and training and other additional expenditures for fiscal year 2026-27 and then reduced further in 2027-28 after which activities will continue to increase based on cost and need to reinstitute training.
Risks to the Forecast
7 Every projection is a combination of assumptions based on analysis of historical data, use of actual data when available (e.g., labor contracts, CalPERS rates), and educated assumptions based on an analysis of available information. In addition to the built-in uncertainty of projections, the City continues to experience uncertainty in the future of revenue and major expenses that would impact the City’s budget due partly to the structure of State municipal finance laws. The major risks to these projections include:
1. Volatile Economy - The City’s revenues are impacted by regional and statewide economic conditions. The City’s three largest General Fund revenue sources are sales, property, and other taxes, with sales taxes representing approximately 50% of all revenue. These revenue streams, and sales tax are sensitive to the broader economic trends and more specifically, consumer spending and development/construction.
2. State Takeaways and Borrowing - During times of economic downturn, the State of California has previously shifted, borrowed, or took money from cities to cover its own budget shortfalls. To protect local governments, Proposition 1A was passed in 2004 to protect local revenues from being transferred away from the state. However, Proposition 1A can be suspended if the Governor declares a fiscal necessity and two-thirds of the Legislature concur. The first emergency suspension of Proposition 1A was passed by the Legislature as part of the 2009-10 budget package. Under this provision the State borrowed 8% of the amount of property tax revenue and was required to repay the obligations plus interest by 2013. After this initial repayment, the legislature may consider only one additional borrowing within a ten-year period. While it cannot be predicted if the State will once again borrow money from local governments, it is a possibility.
3. Insurance Premiums - The City is a participant in the California Intergovernmental Risk Authority (CIRA) which is a self-insured joint powers authority established in 1976 to manage insurance claims, benefit programs, and risk management needs of fifty-two cities or special districts. Continued costs related to both health insurance premiums as well as general liability and workers compensation liability are expected to continue to increase, many in double digits. Just as local governments revenues are subject to impacts from the regional and national economic conditions, the city’s insurance premiums are additionally impacted.
4. Unfunded Liability Pension Costs - Rather than provide retirement benefits through Social Security, the City instead provides pension benefits to its employees and retirees through six pension plans with CalPERS. As of 06/30/2022 (the most recent official information available), the plans had a total accrued liability (the amount necessary, as of the valuation date, to fund all earned pension benefits for current employees, retirees, and beneficiaries now and into the future) of approximately $43.2 million, held approximately $36.4 million in assets, and its plans were underfunded by approximately $6.8 million.
In January 2021, the City issued a pension obligation refunding loan and a street improvements financing loan (UAL Refunding Loans) that allowed it to pay down the UAL by $6,000,000. After the UAL refunding, the City programmed smaller UAL payments to CalPERS, as well as payments on the two loans. Since the loan interest rates are significantly lower than the interest rate charged by CalPERS, the refunding allowed the City to generate approximately $2.25 million in cash flow savings. 8 After the refunding, in July of 2022 CalPERS reported a significant loss of 7.5% leading to a funding shortfall of 14.3% (sum of the 7.5% investment loss and 6.8% discount rate). This shortfall translated to approximately $4.7 million in new UAL for the City. The projections in this forecast are based on the draft 2023 Pension Liability Review generated by Ridgeline Municipal Strategies which did consider the amortization of these losses. However, it does not assume application of no negative amortization schedules or future losses/gains for the current fiscal year forward. Staff are working to prepare a new report for the City Council with the Pension Liability Update.
5. City Operational Changes and Related Staffing Adjustments – The City is continuing to focus on providing the best of class service to our community. This service is provided by three separate bargaining units; the CEA, the Cotati Police Officers Association (CPOA), and the Cotati Police Management Association (CPMA), as well as the Non-Represented group and a single employment agreement with the City manager. Each of these groups negotiate their contracts for a set period that is approved by the City Council. Changes in labor were estimated based on cost trends and did not specifically include projections for staffing FTE increases or new significant contract changes.
6. No Major New One-Time Expenses - The expenditure forecast does not include any provisions for unexpected one-time expenses, such as changes in legislation, unexpected events, acts of nature, or other such factors that could require the City to expend a significant amount of General Fund resources. Also, as mentioned previously, the LRFF does not account for transfers or capital projects, due to the variability of these, but focuses on on-going operational costs/revenues. 9 GENERAL FUND FORECAST
Below are the financial summaries of the three scenarios outlined. The following tables and charts show the General Fund operating fund balance for each of the scenarios over a 10-year period. Full-size detailed tables with the revenues and expenses by classification are included in Appendices A-C Scenario 1 - Appendix A: Baseline – Flat Growth
Scenario 2 – Appendix B: Baseline with Hotel
Fiscal Year
2023/24
Fiscal Year
2024/25
Fiscal Year
2025/26
Fiscal Year
2026/27
Fiscal Year
2027/28
Fiscal Year
2028/29
Fiscal Year
2029/30
Fiscal Year
2030/31
Fiscal Year
2031/32
Fiscal Year
2032/33
Fiscal Year
2033/34
Base Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast 1 BEGINNING FUND BALANCE 10,276,387 6,571,652 7,781,777 9,412,355 11,437,910 11,577,242 11,304,333 10,700,715 9,726,439 8,421,553 6,734,411 2 3 TOTAL REVENUES 10,274,952 11,169,503 11,583,559 11,973,368 12,356,507 12,772,188 13,207,831 13,626,842 14,050,023 14,447,296 14,869,063 4 TOTAL EXPENSES (9,266,451) (9,680,509) (9,680,509) (9,680,509) (11,954,425) (12,786,662) (13,556,962) (14,350,298) (15,107,479) (15,890,149) (16,670,639) 5 ANNUAL SURPLUS OR (DEFICIT) 1,008,501 1,488,994 1,903,050 2,292,859 402,082 (14,474) (349,131) (723,455) (1,057,456) (1,442,853) (1,801,576) 6 7 ENDING OPERATING FUND BAL. 11,284,888 8,060,646 9,684,826 11,705,214 11,839,992 11,562,768 10,955,202 9,977,259 8,668,983 6,978,700 4,932,835 8 9 REQUIRED RESERVE (2,316,613) (2,420,127) (2,420,127) (2,420,127) (2,988,606) (3,196,666) (3,389,241) (3,587,574) (3,776,870) (3,972,537) (4,167,660) 10 11
ENDING OPERATING FUND BAL. AFTER RESERVES BEFORE NON- OPERATING EXPENSES 8,968,275 5,640,519 7,264,699 9,285,086 8,851,385 8,366,102 7,565,962 6,389,685 4,892,113 3,006,163 765,175 12 13
NET NON-OPERATING REVENUES &
EXPENSE
(4,713,236) (278,870) (272,471) (267,303) (262,750) (258,435) (254,487) (250,820) (247,430) (244,289) (234,426) 14 15
ENDING FUND BAL. AFTER
RESERVES & NON-OPERATING
REVENUES AND EXPENSES
4,255,039 5,361,649 6,992,228 9,017,783 8,588,635 8,107,667 7,311,474 6,138,865 4,644,684 2,761,874 530,749 16 Excess Reserve as a % of Operating Exp. 46% 55% 72% 93% 72% 63% 54% 43% 31% 17% 3% SCENARIO 1 - GENERAL FUND FINANCIAL FORECAST SUMMARY - BASELINE - FLAT GROWTH GENERAL FUND TEN YEAR FORECAST 2023/24-2033/34
Fiscal Year
2023/24
Fiscal Year
2024/25
Fiscal Year
2025/26
Fiscal Year
2026/27
Fiscal Year
2027/28
Fiscal Year
2028/29
Fiscal Year
2029/30
Fiscal Year
2030/31
Fiscal Year
2031/32
Fiscal Year
2032/33
Fiscal Year
2033/34
Base Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast 1 BEGINNING FUND BALANCE 10,276,387 6,616,652 6,932,225 8,615,272 10,021,715 11,059,762 11,723,373 12,108,225 12,175,194 12,981,265 12,770,138 2 3 TOTAL REVENUES 10,274,952 10,274,952 12,334,503 12,811,351 13,255,222 13,708,708 14,196,301 14,668,087 10,274,952 15,140,641 15,140,641 4 TOTAL EXPENSES (9,221,451) (9,680,509) (10,378,986) (11,137,604) (11,954,425) (12,786,662) (13,556,962) (14,350,298) (9,221,451) (15,107,479) (15,890,149) 5 ANNUAL SURPLUS OR (DEFICIT) 1,053,501 594,443 1,955,518 1,673,747 1,300,797 922,046 639,339 317,789 1,053,501 33,162 (749,508) 6 7
ENDING OPERATING FUND
BALANCE
11,329,888 7,211,095 8,887,743 10,289,018 11,322,512 11,981,807 12,362,712 12,426,014 13,228,695 13,014,427 12,020,629 8 9 REQUIRED RESERVE (2,305,363) (2,420,127) (2,594,746) (2,784,401) (2,988,606) (3,196,666) (3,389,241) (3,587,574) (2,305,363) (3,776,870) (3,972,537) 10 11
ENDING OPERATING FUND
BALANCE AFTER RESERVES BEFORE
CAPITAL
9,024,525 4,790,968 6,292,997 7,504,617 8,333,905 8,785,142 8,973,471 8,838,439 10,923,332 9,237,557 8,048,092 12 13
NET NON-OPERATING REVENUES &
EXPENSE
(4,713,236) (278,870) (272,471) (267,303) (262,750) (258,435) (254,487) (250,820) (247,430) (244,289) (234,426) 14 15
ENDING FUND BAL. AFTER
RESERVES & NON-OPERATING
REVENUES AND EXPENSES
4,311,289 4,512,098 6,020,526 7,237,314 8,071,155 8,526,707 8,718,984 8,587,619 10,675,902 8,993,268 7,813,666 16 Excess Reserve as a % of Operating Exp. 47% 47% 58% 65% 68% 67% 64% 60% 116% 60% 49% SCENARIO 2 - GENERAL FUND FINANCIAL FORECAST SUMMARY - BASELINE -WITH HOTEL GENERAL FUND TEN YEAR FORECAST 2022/23-2032/33 10 Scenario 3 – Appendix C: Recession in 2026/27
Fiscal Year
2023/24
Fiscal Year
2024/25
Fiscal Year
2025/26
Fiscal Year
2026/27
Fiscal Year
2027/28
Fiscal Year
2028/29
Fiscal Year
2029/30
Fiscal Year
2030/31
Fiscal Year
2031/32
Fiscal Year
2032/33
Fiscal Year
2033/34
Base Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast 1 BEGINNING FUND BALANCE 10,276,387 6,616,652 8,450,506 9,744,994 8,064,195 4,725,266 532,556 (4,179,306) (9,333,169) (14,839,997) (20,724,018) 2 3 TOTAL REVENUES 10,274,952 11,793,232 11,945,945 9,284,174 8,059,079 7,795,405 7,806,186 7,920,691 8,086,419 8,255,980 8,429,470 4 TOTAL EXPENSES (9,221,451) (9,680,509) (10,378,986) (10,697,669) (11,135,257) (11,729,681) (12,263,561) (12,823,733) (13,345,817) (13,895,712) (14,451,807) 5 ANNUAL SURPLUS OR (DEFICIT) 1,053,501 2,112,723 1,566,959 (1,413,496) (3,076,178) (3,934,275) (4,457,375) (4,903,043) (5,259,399) (5,639,732) (6,022,337) 6 7 ENDING OPERATING FUND BAL. 11,329,888 8,729,375 10,017,465 8,331,498 4,988,017 790,991 (3,924,819) (9,082,349) (14,592,567) (20,479,729) (26,746,356) 8 9 REQUIRED RESERVE (2,305,363) (2,420,127) (2,594,746) (2,674,417) (2,783,814) (2,932,420) (3,065,890) (3,205,933) (3,336,454) (3,473,928) (3,612,952) 10 11
ENDING OPERATING FUND BAL. AFTER RESERVES BEFORE NON- OPERATING EXPENSES 9,024,525 6,309,248 7,422,719 5,657,081 2,204,202 (2,141,429) (6,990,709) (12,288,282) (17,929,022) (23,953,657) (30,359,307) 12 13
NET NON-OPERATING REVENUES &
EXPENSE
(4,713,236) (278,870) (272,471) (267,303) (262,750) (258,435) (254,487) (250,820) (247,430) (244,289) (234,426) 14 15
ENDING FUND BAL. AFTER
RESERVES & NON-OPERATING
REVENUES AND EXPENSES
4,311,289 6,030,378 7,150,248 5,389,777 1,941,452 (2,399,864) (7,245,196) (12,539,102) (18,176,451) (24,197,946) (30,593,733) 16 Excess Reserve as a % of Operating Exp. 47% 62% 69% 50% 17% -20% -59% -98% -136% -174% -212% SCENARIO 3 - GENERAL FUND FINANCIAL FORECAST SUMMARY - Recession 2026/27 GENERAL FUND TEN YEAR FORECAST 2023/24-2033/34 11 REVENUES HISTORICAL TRENDS
Chart 1 provides a summary of the total General Fund Actual Revenues from 2000 to 2022 and budget revenues for fiscal year 2022-23.
CHART 1 – General Fund Revenue FY 2000-2001 to FY 2022-23 Chart 2 provides a summary of the top two General Fund revenue source types from 2000 to 2022.
CHART 2 – Revenue Trends FY 2000-2024
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
$8.0
$9.0
2000200120022003200420052006200720082009201020112012201320142015201620172018201920202021202220232024 Property Tax Sales Tax Bradley Burns Sales Tax Measure A/G/S Top Revenue Historical Trends
Millions
APPENDIX - DEAIL SCENARIO REPORTS
Included within this appendix are the details for the Revenues and Expenses by Function for the General Fund, as summarized within the scenario summaries under General Fund Forecast. This provides in-depth information on the exact change by fiscal year based on each function as outlined in the assumptions.
Appendix Table A. Baseline – Flat Growth
Budget
Row Labels Sum of 2019 Sum of 2020 Sum of 2021 Sum of 2022 Sum of 2023 Sum of 2024 Sum of 2025 Sum of 2026 Sum of 2027 Sum of 2028 Sum of 2029 Sum of 2030 Sum of 2031 Sum of 2032 Sum of 2033 Sum of 2034 Revenue
601 PROPERTY TAX 1,734,281 1,813,280 1,773,535 1,873,508 1,967,056 2,131,758 2,175,119 2,259,073 2,349,354 2,430,844 2,517,242 2,602,251 2,688,269 2,774,166 2,860,709 2,946,715 603 SALES TAX 5,109,212 5,001,563 5,837,741 6,230,425 6,024,055 6,084,000 6,531,894 6,764,564 6,992,990 7,220,184 7,472,364 7,712,543 7,954,127 8,197,007 8,415,500 8,653,271 604 OTHER TAX 416,685 509,572 668,954 723,670 678,562 652,300 711,818 756,096 796,123 835,846 874,907 913,848 955,142 996,533 1,034,837 1,075,156 606 LICENSE & FRANCHISE 515,546 546,010 623,563 686,807 718,840 556,500 662,359 685,073 701,177 719,081 736,260 753,438 771,171 789,268 807,403 825,569 607 RENTS 96,344 101,474 71,712 80,114 102,463 78,000 94,271 97,590 102,528 105,558 109,706 113,838 117,959 122,074 126,187 130,297 608 REVENUE - OTHER AGENCIES 303,488 189,454 200,751 107,218 151,897 207,150 176,096 164,804 156,077 147,995 140,609 133,215 125,948 118,758 111,617 104,507 609 OTHER REVENUE 89,461 86,628 237,173 316,772 2,303,881 45,058 195,398 207,559 215,194 222,391 228,881 263,839 278,042 292,830 307,717 324,452 620 CHARGES FOR SVS 396,277 434,938 1,035,074 573,294 602,780 463,186 526,013 547,336 549,994 556,685 566,341 581,382 596,282 612,810 629,561 648,151 660 CONTRIBUTIONS 17,813 16,986 10,643 19,184 22,928 12,000 18,345 19,061 22,032 24,058 26,111 27,872 30,168 31,482 33,320 35,154 680 SPECIAL REVENUES 58,823 42,149 32,237 80,885 86,388 45,000 78,191 82,403 87,901 93,864 99,766 105,606 109,734 115,094 120,446 125,791 Revenue Total 8,737,930 8,742,054 10,491,382 10,691,875 12,658,849 10,274,952 11,169,503 11,583,559 11,973,368 12,356,507 12,772,188 13,207,831 13,626,842 14,050,023 14,447,296 14,869,063 Operating Expense
700 WAGES & SALARIES (2,101,593) (2,401,745) (2,676,683) (2,616,594) (2,827,383) (3,538,015) (3,552,687) (3,800,631) (4,050,135) (4,300,260) (4,552,074) (4,804,798) (5,058,128) (5,311,229) (5,565,653) (5,820,630) 701 INCENTIVES (151,047) (59,885) (69,258) (95,476) (124,019) (126,550) (148,171) (164,982) (182,348) (200,200) (217,928) (235,907) (252,551) (270,008) (287,458) (304,971) 702 FRINGE BENEFITS (26,395) (23,215) (23,741) (22,435) (24,477) (26,620) (28,080) (28,894) (29,980) (31,118) (32,283) (33,464) (34,582) (35,742) (36,953) (38,133) 703 LEAVE (387,901) (393,354) (379,118) (456,352) (520,498) (457,450) (512,514) (543,996) (579,224) (616,000) (654,243) (694,068) (735,649) (779,216) (822,436) (866,008) 704 DEDUCTIONS (1,057,320) (901,273) (1,028,266) (6,086,622) (803,913) (853,700) (929,302) (998,638) (1,068,344) (1,138,267) (1,266,074) (1,316,724) (1,361,327) (1,405,787) (1,450,384) (1,495,094) 705 INSURANCE (382,442) (418,427) (446,918) (475,754) (463,828) (512,250) (523,116) (546,221) (569,201) (592,872) (617,101) (640,518) (664,837) (689,659) (714,957) (740,205) 706 TAX (37,826) (42,144) (46,748) (47,897) (52,955) (61,120) (62,981) (67,057) (70,926) (75,268) (79,395) (83,524) (87,723) (91,880) (96,039) (100,200) 707 PAYOUTS (419,961) (47,380) (95,899) (127,743) (147,303) (107,770) (102,987) (71,809) (59,814) (59,496) (59,271) (59,105) (58,967) (58,846) (58,729) (58,634) 720 MISCELLANEOUS PAYROLL - (411) (335) (896) - - (102) (81) (24) (39) (15) (3) - - - - 800 MATERIAL & SUPPLY (64,362) (109,997) (77,248) (81,625) (101,585) (76,762) (82,816) (82,380) (81,078) (79,803) (80,542) (82,037) (83,564) (85,106) (87,033) (88,863) 801 CONTRACT SERVICES (901,987) (843,450) (972,430) (1,210,533) (1,358,546) (1,745,397) (1,885,865) (2,066,713) (2,276,630) (2,479,973) (2,685,427) (2,887,650) (3,088,083) (3,298,597) (3,508,639) (3,716,077) 802 LEGAL (83,806) (88,869) (155,975) (81,420) (84,837) (111,064) (112,525) (123,764) (133,785) (144,748) (155,832) (166,900) (177,981) (189,106) (200,233) (211,361) 803 UTILITIES (238,791) (261,389) (297,152) (245,669) (335,068) (350,597) (356,161) (386,305) (420,318) (455,642) (491,148) (526,571) (562,081) (597,466) (633,031) (668,684) 805 REPAIR & MAINTENANCE (96,745) (236,618) (233,947) (115,371) (113,920) (53,400) (84,752) (74,212) (64,983) (96,170) (81,086) (76,690) (101,585) (75,116) (72,748) (70,429) 806 OTHER EXPENSES (588,600) (599,062) (765,725) (698,540) (912,728) (1,103,096) (1,191,200) (1,316,143) (1,446,017) (1,578,796) (1,709,009) (1,843,541) (1,976,990) (2,110,984) (2,245,738) (2,379,851) 807 FISCAL FEES (57,064) (45,603) (41,854) (56,960) (51,251) (58,480) (59,908) (61,233) (62,733) (64,236) (66,312) (68,308) (70,276) (72,253) (74,200) (76,135) 808 DEBT SERVICE (3,878) (6,736) (11,855) (9,194) (908) (8,180) (5,288) (5,191) (5,030) (5,137) (5,470) (5,804) (6,136) (6,465) (6,795) (7,124) 809 CAPITAL OUTLAY - (14,160) (16,646) (55,456) (31,550) - (15,776) (14,124) (11,517) (12,432) (10,963) (10,271) (10,106) (10,157) (10,213) (10,274) 811 MISCELLANEOUS EXPENSE (17,818) (27,033) (27,927) (78,176) (4,790) (31,000) (26,279) (26,612) (25,517) (23,967) (22,488) (21,079) (19,732) (19,862) (18,909) (17,965) Operating Expense Total (6,617,536) (6,520,750) (7,367,724) (12,562,712) (7,959,558) (9,221,451) (9,680,509) (10,378,986) (11,137,604) (11,954,425) (12,786,662) (13,556,962) (14,350,298) (15,107,479) (15,890,149) (16,670,639) Non-Operating Revenues & Expenses
650 INVESTMENT EARNINGS 126,272 103,797 56,654 19,717 187,176 166,000 196,018 202,281 207,200 211,729 215,899 219,739 223,277 226,541 229,556 239,296 670 TRANSFR IN & OTHR SOURCES 250,000 339,236 219,431 5,934,212 391,922 202,000 180,112 180,248 180,497 180,521 180,667 180,774 180,903 181,029 181,154 181,278 808 DEBT SERVICE - - - (62,062) 50,440 (655,000) (655,000) (655,000) (655,000) (655,000) (655,000) (655,000) (655,000) (655,000) (655,000) (655,000) 810 TRANS OUT & OTHER USES (984,431) (2,630,461) (1,567,550) (4,144,478) (4,052,652) (4,426,236) - - - - - - - - - - Non-Operating Revenues & Expenses Total (608,160) (2,187,428) (1,291,465) 1,747,389 (3,423,115) (4,713,236) (278,870) (272,471) (267,303) (262,750) (258,435) (254,487) (250,820) (247,430) (244,289) (234,426) Grand Total 1,512,235 33,876 1,832,193 (123,448) 1,276,176 (3,659,735) 1,210,125 932,102 568,460 139,332 (272,909) (603,618) (974,275) (1,304,886) (1,687,143) (2,036,002) Audited Actual Strategic Forecast Long-Range Forecast
Appendix Table B – Baseline with Hotel
Budget
Row Labels Sum of 2019 Sum of 2020 Sum of 2021 Sum of 2022 Sum of 2023 Sum of 2024 Sum of 2025 Sum of 2026 Sum of 2027 Sum of 2028 Sum of 2029 Sum of 2030 Sum of 2031 Sum of 2032 Sum of 2033 Sum of 2034 Revenue
601 PROPERTY TAX 1,734,281 1,813,280 1,773,535 1,873,508 1,967,056 2,131,758 2,175,119 2,303,073 2,373,450 2,459,096 2,549,613 2,638,715 2,728,811 2,818,777 2,909,381 2,999,443 603 SALES TAX 5,109,212 5,001,563 5,837,741 6,230,425 6,024,055 6,084,000 6,597,173 6,857,213 7,069,723 7,316,635 7,563,802 7,811,201 8,058,813 8,302,198 8,548,335 8,794,447 604 OTHER TAX 416,685 509,572 668,954 723,670 678,562 652,300 711,818 1,370,391 1,533,277 1,609,858 1,687,620 1,767,196 1,851,157 1,937,349 2,022,694 2,112,406 606 LICENSE & FRANCHISE 515,546 546,010 623,563 686,807 718,840 556,500 662,359 685,073 701,177 719,081 736,260 753,438 771,171 789,268 807,403 825,569 607 RENTS 96,344 101,474 71,712 80,114 102,463 78,000 94,271 97,590 102,528 105,558 109,706 113,838 117,959 122,074 126,187 130,297 608 REVENUE - OTHER AGENCIES 303,488 189,454 200,751 107,218 151,897 207,150 176,096 164,804 156,077 147,995 140,609 133,215 125,948 118,758 111,617 104,507 609 OTHER REVENUE 89,461 86,628 237,173 316,772 2,303,881 45,058 195,398 207,559 215,194 222,391 228,881 263,839 278,042 292,830 307,717 324,452 620 CHARGES FOR SVS 396,277 434,938 1,035,074 573,294 602,780 463,186 883,857 547,336 549,994 556,685 566,341 581,382 596,282 612,810 629,561 648,151 660 CONTRIBUTIONS 17,813 16,986 10,643 19,184 22,928 12,000 18,345 19,061 22,032 24,058 26,111 27,872 30,168 31,482 33,320 35,154 680 SPECIAL REVENUES 58,823 42,149 32,237 80,885 86,388 45,000 78,191 82,403 87,901 93,864 99,766 105,606 109,734 115,094 120,446 125,791 Revenue Total 8,737,930 8,742,054 10,491,382 10,691,875 12,658,849 10,274,952 11,592,626 12,334,503 12,811,351 13,255,222 13,708,708 14,196,301 14,668,087 15,140,641 15,616,659 16,100,218 Operating Expense
700 WAGES & SALARIES (2,101,593) (2,401,745) (2,676,683) (2,616,594) (2,827,383) (3,538,015) (3,552,687) (3,800,631) (4,050,135) (4,300,260) (4,552,074) (4,804,798) (5,058,128) (5,311,229) (5,565,653) (5,820,630) 701 INCENTIVES (151,047) (59,885) (69,258) (95,476) (124,019) (126,550) (148,171) (164,982) (182,348) (200,200) (217,928) (235,907) (252,551) (270,008) (287,458) (304,971) 702 FRINGE BENEFITS (26,395) (23,215) (23,741) (22,435) (24,477) (26,620) (28,080) (28,894) (29,980) (31,118) (32,283) (33,464) (34,582) (35,742) (36,953) (38,133) 703 LEAVE (387,901) (393,354) (379,118) (456,352) (520,498) (457,450) (512,514) (543,996) (579,224) (616,000) (654,243) (694,068) (735,649) (779,216) (822,436) (866,008) 704 DEDUCTIONS (1,057,320) (901,273) (1,028,266) (6,086,622) (803,913) (853,700) (929,302) (998,638) (1,068,344) (1,138,267) (1,266,074) (1,316,724) (1,361,327) (1,405,787) (1,450,384) (1,495,094) 705 INSURANCE (382,442) (418,427) (446,918) (475,754) (463,828) (512,250) (523,116) (546,221) (569,201) (592,872) (617,101) (640,518) (664,837) (689,659) (714,957) (740,205) 706 TAX (37,826) (42,144) (46,748) (47,897) (52,955) (61,120) (62,981) (67,057) (70,926) (75,268) (79,395) (83,524) (87,723) (91,880) (96,039) (100,200) 707 PAYOUTS (419,961) (47,380) (95,899) (127,743) (147,303) (107,770) (102,987) (71,809) (59,814) (59,496) (59,271) (59,105) (58,967) (58,846) (58,729) (58,634) 720 MISCELLANEOUS PAYROLL - (411) (335) (896) - - (102) (81) (24) (39) (15) (3) - - - - 800 MATERIAL & SUPPLY (64,362) (109,997) (77,248) (81,625) (101,585) (76,762) (82,816) (82,380) (81,078) (79,803) (80,542) (82,037) (83,564) (85,106) (87,033) (88,863) 801 CONTRACT SERVICES (901,987) (843,450) (972,430) (1,210,533) (1,358,546) (1,745,397) (1,885,865) (2,066,713) (2,276,630) (2,479,973) (2,685,427) (2,887,650) (3,088,083) (3,298,597) (3,508,639) (3,716,077) 802 LEGAL (83,806) (88,869) (155,975) (81,420) (84,837) (111,064) (112,525) (123,764) (133,785) (144,748) (155,832) (166,900) (177,981) (189,106) (200,233) (211,361) 803 UTILITIES (238,791) (261,389) (297,152) (245,669) (335,068) (350,597) (356,161) (386,305) (420,318) (455,642) (491,148) (526,571) (562,081) (597,466) (633,031) (668,684) 805 REPAIR & MAINTENANCE (96,745) (236,618) (233,947) (115,371) (113,920) (53,400) (84,752) (74,212) (64,983) (96,170) (81,086) (76,690) (101,585) (75,116) (72,748) (70,429) 806 OTHER EXPENSES (588,600) (599,062) (765,725) (698,540) (912,728) (1,103,096) (1,191,200) (1,316,143) (1,446,017) (1,578,796) (1,709,009) (1,843,541) (1,976,990) (2,110,984) (2,245,738) (2,379,851) 807 FISCAL FEES (57,064) (45,603) (41,854) (56,960) (51,251) (58,480) (59,908) (61,233) (62,733) (64,236) (66,312) (68,308) (70,276) (72,253) (74,200) (76,135) 808 DEBT SERVICE (3,878) (6,736) (11,855) (9,194) (908) (8,180) (5,288) (5,191) (5,030) (5,137) (5,470) (5,804) (6,136) (6,465) (6,795) (7,124) 809 CAPITAL OUTLAY - (14,160) (16,646) (55,456) (31,550) - (15,776) (14,124) (11,517) (12,432) (10,963) (10,271) (10,106) (10,157) (10,213) (10,274) 811 MISCELLANEOUS EXPENSE (17,818) (27,033) (27,927) (78,176) (4,790) (31,000) (26,279) (26,612) (25,517) (23,967) (22,488) (21,079) (19,732) (19,862) (18,909) (17,965) Operating Expense Total (6,617,536) (6,520,750) (7,367,724) (12,562,712) (7,959,558) (9,221,451) (9,680,509) (10,378,986) (11,137,604) (11,954,425) (12,786,662) (13,556,962) (14,350,298) (15,107,479) (15,890,149) (16,670,639) Non-Operating Revenues & Expenses
650 INVESTMENT EARNINGS 126,272 103,797 56,654 19,717 187,176 600,000 246,018 252,281 257,200 261,729 265,899 269,739 273,277 276,541 279,556 289,296 670 TRANSFR IN & OTHR SOURCES 250,000 339,236 219,431 5,934,212 391,922 202,000 215,112 215,248 215,497 215,521 215,667 215,774 215,903 216,029 216,154 216,278 808 DEBT SERVICE - - - (62,062) 50,440 (655,000) (655,000) (655,000) (655,000) (655,000) (655,000) (655,000) (655,000) (655,000) (655,000) (655,000) 810 TRANS OUT & OTHER USES (984,431) (2,630,461) (1,567,550) (4,144,478) (4,052,652) (4,426,236) - - - - - - - - - - Non-Operating Revenues & Expenses Total (608,160) (2,187,428) (1,291,465) 1,747,389 (3,423,115) (4,279,236) (193,870) (187,471) (182,303) (177,750) (173,435) (169,487) (165,820) (162,430) (159,289) (149,426) Grand Total 1,512,235 33,876 1,832,193 (123,448) 1,276,176 (3,225,735) 1,718,247 1,768,047 1,491,443 1,123,047 748,611 469,852 151,969 (129,268) (432,779) (719,847) Audited Actual Strategic Forecast Long-Range Forecast 15 C – Recession in 2026/27
Budget
Row Labels Sum of 2019 Sum of 2020 Sum of 2021 Sum of 2022 Sum of 2023 Sum of 2024 Sum of 2025 Sum of 2026 Sum of 2027 Sum of 2028 Sum of 2029 Sum of 2030 Sum of 2031 Sum of 2032 Sum of 2033 Sum of 2034 Revenue
601 PROPERTY TAX 1,734,281 1,813,280 1,773,535 1,873,508 1,967,056 2,131,758 2,175,119 2,303,073 2,402,105 1,801,579 1,531,342 1,531,342 1,531,342 1,580,345 1,630,916 1,683,105 603 SALES TAX 5,109,212 5,001,563 5,837,741 6,230,425 6,024,055 6,084,000 6,597,173 6,847,890 4,451,128 4,228,572 4,228,572 4,228,572 4,313,143 4,399,406 4,487,394 4,577,142 604 OTHER TAX 416,685 509,572 668,954 723,670 678,562 652,300 1,270,268 991,156 842,482 631,862 631,862 631,862 638,180 644,562 651,008 657,518 606 LICENSE & FRANCHISE 515,546 546,010 623,563 686,807 718,840 556,500 662,359 685,073 582,312 436,734 436,734 436,734 441,101 445,512 449,967 454,467 607 RENTS 96,344 101,474 71,712 80,114 102,463 78,000 94,271 97,590 63,434 60,262 60,262 60,262 61,467 62,697 63,951 65,230 608 REVENUE - OTHER AGENCIES 303,488 189,454 200,751 107,218 151,897 207,150 176,096 164,804 168,100 171,462 174,891 178,389 181,957 185,596 189,308 193,094 609 OTHER REVENUE 89,461 86,628 237,173 316,772 2,303,881 45,058 195,398 207,559 176,425 132,319 132,319 136,357 137,721 139,098 140,489 141,894 620 CHARGES FOR SVS 396,277 434,938 1,035,074 573,294 602,780 463,186 526,013 547,336 492,603 487,676 487,676 487,676 497,430 507,379 517,526 527,877 660 CONTRIBUTIONS 17,813 16,986 10,643 19,184 22,928 12,000 18,345 19,061 19,061 19,061 19,061 19,061 19,061 19,061 19,061 19,061 680 SPECIAL REVENUES 58,823 42,149 32,237 80,885 86,388 45,000 78,191 82,403 86,523 89,551 92,686 95,930 99,287 102,762 106,359 110,082 Revenue Total 8,737,930 8,742,054 10,491,382 10,691,875 12,658,849 10,274,952 11,793,232 11,945,945 9,284,174 8,059,079 7,795,405 7,806,186 7,920,691 8,086,419 8,255,980 8,429,470 Operating Expense 700 WAGES & SALARIES (2,101,593) (2,401,745) (2,676,683) (2,616,594) (2,827,383) (3,538,015) (3,552,687) (3,800,631) (4,044,123) (4,288,400) (4,534,593) (4,781,996) (5,030,331) (5,278,787) (5,528,941) (5,780,046) 701 INCENTIVES (151,047) (59,885) (69,258) (95,476) (124,019) (126,550) (148,171) (164,982) (165,893) (166,803) (167,714) (168,625) (169,536) (170,448) (171,359) (172,270) 702 FRINGE BENEFITS (26,395) (23,215) (23,741) (22,435) (24,477) (26,620) (28,080) (28,894) (30,339) (31,856) (33,448) (35,121) (36,877) (38,721) (40,657) (42,689) 703 LEAVE (387,901) (393,354) (379,118) (456,352) (520,498) (457,450) (512,514) (543,996) (588,499) (611,780) (636,093) (661,136) (686,777) (713,258) (740,512) (768,501) 704 DEDUCTIONS (1,057,320) (901,273) (1,028,266) (6,086,622) (803,913) (853,700) (929,302) (998,638) (1,026,935) (1,055,252) (1,140,992) (1,149,739) (1,151,891) (1,154,044) (1,156,198) (1,158,356) 705 INSURANCE (382,442) (418,427) (446,918) (475,754) (463,828) (512,250) (523,116) (546,221) (584,066) (613,549) (644,381) (676,758) (710,675) (746,241) (783,538) (822,653) 706 TAX (37,826) (42,144) (46,748) (47,897) (52,955) (61,120) (62,981) (67,057) (67,265) (67,485) (67,705) (67,925) (68,144) (68,363) (68,583) (68,802) 707 PAYOUTS (419,961) (47,380) (95,899) (127,743) (147,303) (107,770) (102,987) (71,809) (74,875) (78,004) (81,200) (83,419) (85,656) (87,910) (90,185) (92,482) 720 MISCELLANEOUS PAYROLL - (411) (335) (896) - - (102) (81) (81) (81) (81) (81) (81) (81) (81) (81) 800 MATERIAL & SUPPLY (64,362) (109,997) (77,248) (81,625) (101,585) (76,762) (82,816) (82,380) (86,490) (89,576) (92,765) (96,055) (99,450) (102,954) (106,570) (110,303) 801 CONTRACT SERVICES (901,987) (843,450) (972,430) (1,210,533) (1,358,546) (1,745,397) (1,885,865) (2,066,713) (2,179,255) (2,268,095) (2,360,744) (2,453,772) (2,548,674) (2,652,061) (2,754,378) (2,859,331) 802 LEGAL (83,806) (88,869) (155,975) (81,420) (84,837) (111,064) (112,525) (123,764) (131,836) (139,920) (148,109) (156,354) (164,711) (173,138) (181,640) (190,217) 803 UTILITIES (238,791) (261,389) (297,152) (245,669) (335,068) (350,597) (356,161) (386,305) (416,011) (442,870) (469,972) (497,362) (525,053) (553,038) (581,333) (609,948) 805 REPAIR & MAINTENANCE (96,745) (236,618) (233,947) (115,371) (113,920) (53,400) (84,752) (74,212) (66,009) (97,429) (82,703) (78,694) (103,399) (77,236) (75,225) (73,316) 806 OTHER EXPENSES (588,600) (599,062) (765,725) (698,540) (912,728) (1,103,096) (1,191,200) (1,316,143) (1,133,548) (1,084,562) (1,166,326) (1,250,298) (1,332,763) (1,416,207) (1,499,443) (1,581,877) 807 FISCAL FEES (57,064) (45,603) (41,854) (56,960) (51,251) (58,480) (59,908) (61,233) (63,543) (65,495) (67,757) (70,096) (72,513) (75,010) (77,588) (80,251) 808 DEBT SERVICE (3,878) (6,736) (11,855) (9,194) (908) (8,180) (5,288) (5,191) (5,200) (5,179) (5,162) (5,148) (5,138) (5,133) (5,131) (5,134) 809 CAPITAL OUTLAY - (14,160) (16,646) (55,456) (31,550) - (15,776) (14,124) (5,758) - - - - - - - 811 MISCELLANEOUS EXPENSE (17,818) (27,033) (27,927) (78,176) (4,790) (31,000) (26,279) (26,612) (27,942) (28,920) (29,932) (30,980) (32,064) (33,187) (34,348) (35,550) Operating Expense Total (6,617,536) (6,520,750) (7,367,724) (12,562,712) (7,959,558) (9,221,451) (9,680,509) (10,378,986) (10,697,669) (11,135,257) (11,729,681) (12,263,561) (12,823,733) (13,345,817) (13,895,712) (14,451,807) Non-Operating Revenues & Expenses
650 INVESTMENT EARNINGS 126,272 103,797 56,654 19,717 187,176 600,000 246,018 252,281 126,140 113,526 102,174 91,956 92,876 93,805 94,743 95,690 670 TRANSFR IN & OTHR SOURCES 250,000 339,236 219,431 5,934,212 391,922 202,000 215,112 215,248 215,248 215,248 215,248 215,248 215,248 215,248 215,248 215,248 808 DEBT SERVICE - - - (62,062) 50,440 (655,000) (655,000) (655,000) (687,750) (711,821) (736,735) (762,521) (789,209) (816,831) (845,420) (875,010) 810 TRANS OUT & OTHER USES (984,431) (2,630,461) (1,567,550) (4,144,478) (4,052,652) (4,426,236) - - - - - - - - - - Non-Operating Revenues & Expenses Total (608,160) (2,187,428) (1,291,465) 1,747,389 (3,423,115) (4,279,236) (193,870) (187,471) (346,361) (383,047) (419,313) (455,316) (481,085) (507,778) (535,429) (564,072) Grand Total 1,512,235 33,876 1,832,193 (123,448) 1,276,176 (3,225,735) 1,918,854 1,379,488 (1,759,857) (3,459,225) (4,353,588) (4,912,691) (5,384,127) (5,767,177) (6,175,162) (6,586,409) Actual Strategic Forecast Long-Range Forecast
16 Cotati City Council
Agenda Staff Report
Item type: REGULAR AGENDA (ACTION)
To: City Council
Subject: REVIEW OF CITY COUNCIL GOALS AND OBJECTIVES FOR FISCAL YEAR 2024-25
Date: February 20, 2024
Written by: Damien O'Bid, City Manager
Recommendation
It is recommended that the City Council review the goals and objectives for the current fiscal year and provide direction, if any, on revisions for fiscal year 2024-25.
Background
Each year, the City Council reviews the overall City Goals and Objectives. On occasion, these goals and objectives are updated to reflect new or changing City priorities.
Analysis/Discussion
Attached are the final goals and objectives from the Fiscal Year 2023-24 budget process.
Financial Considerations
None.
Environmental Issues
Not Applicable.
c:\inetpub\wwwroot\multitenant\temp\final council goals fy 2023-2024.pdf 2023-2024
GOALS AND OBJECTIVES
1. Goal: Ensure long-term vitality for the City.
a. Objective: Promote a balanced budget that meets the community vision for City services
b. Objective: Economic Development
i. ED Strategy
1. Business Attraction/Retention program
2. Removing barriers to market entry
3. Promotion of Cotati for businesses
ii. Revenue enhancement
c. Objective: Facilitate affordable housing, new development, and new infrastructure consistent with vision and goals of the General Plan and EIR
d. Objective: Preserve City infrastructure to meet community needs e. Objective: Actively pursue all feasible grant opportunities to implement identified projects
2. Goal: Actively work to mitigate and adapt to the impact of climate change in accordance with adopted City Council policies.
a. Objective: City to continue implementing the local goals in the adopted Climate Acton 2020 and Beyond plan to achieve greenhouse gas (GHG) reduction targets for City operations and the community.
b. Objective: City to implement measures, policies and communications to assist in the adaptation of identified climate change impacts in the community.
3. Goal: Provide core services consistent with best-in-class community service levels. a. Objective: Ensure community safety and quality (Police, Planning, Building, Public Works and Code Enforcement)
b. Objective: Support high level core day-to-day services in all departments. c. Objective: Improve emergency preparedness, including wildfire preparedness. c:\inetpub\wwwroot\multitenant\temp\final council goals fy 2023-2024.pdf d. Objective: Update City regulations to respond to applicable legislative and legal changes
e. Objective: Provide convenient and reliable zoning, permitting, and development services
f. Objective: Represent City’s interest by participation in region-wide issues g. Objective: Pursue opportunities to improve service delivery, including joint procurement, leveraging internal and external staffing resources, and developing systems, polices and procedures to streamline processes and expand capabilities of staff
4. Goal: Promote community engagement to inform and encourage participation a. Objective: Develop programs, projects & processes to enhance community engagement
b. Objective: Continue to improve public information and awareness of programs and services
c. Objective: Explore possibilities of incorporating neighborhood level programming into City activities
5. Goal: Promote an equitable, compassionate, and healthy community that honors diversity as a source of strength
a. Objective: Ensure that all city government operations are inclusive and equitable:
Fairness in hiring and promotions, greater opportunities in contracting, and equitable services to all residents.
b. Objective: Advance equity and health in partnership with Cotati residents and stakeholders, other jurisdictions, and non-governmental organizations.
Cotati City Council
Agenda Staff Report
Item type: REGULAR AGENDA (ACTION)
To: City Council
Subject: STUDY SESSION ON STRATEGIC PLANNING FOR FISCAL YEAR 2024-2025
Date: February 20, 2024
Written by: Damien O'Bid, City Manager
Recommendation
Study Session on Strategic Planning for Fiscal Year 2024-2025. No action will be taken by the City Council.
Background
Attached is the following:
• Worksheets that summarize the daily activities, using the actual timesheet data for the daily activities in 2023.
• Updated worksheets, modeled after an example from Morgan Hill, summarizing programmed projects in the current fiscal year, new projects added during the year, proposed projects for fiscal year 2024/25, and associated time estimates and approximate schedules.
Analysis/Discussion
The attached worksheets are intended to provide the City Council and community with context about staff commitments to perform daily activities, which in turn informs staff availability to complete special projects. The proposed projects for fiscal year 2024/25 are based on carryover projects previously directed by the City Council, anticipated projects from the City Council or community feedback, and required projects based on legislation, permits, or regulatory documents.
Financial Considerations
Based on the current projects of flat revenue and increasing operational expenses, staff intends to bring forward a draft budget with no new full-time equivalent (FTE) positions. Therefore, staff time will be limited to the current levels, with a proposed focus on select projects and policy areas.
Environmental Issues
Not applicable.
Day to Day Activities
Effective
FTE
Day-to-Day Responsibilities (CM)
Administration 1.13
All Staff Meetings 0.01
AV Room 0.03
Budget/Strategic Planning 0.04
Cannabis Permitting 0.01
City Council, City Council Meetings 0.41
Advisory Bodies (Measure S/Successor/PC) 0.03
Contracts/Agreements 0.06
Economic Development 0.08
Emergency Response 0.10
Human Resources (benefits management) 0.21
Labor/Personnel 0.04
Litigation/Risk Management 0.03
Mobile Home Rent Stabilization 0.01
Notary 0.00
Operations/Deparmental Oversight 0.32
Records and Policy Management 0.00
PRA Request/Subpoenas 0.11
Public Information & Outreach 0.27
Records and Policies 0.26
Recruitment 0.09
Safety 0.06
Solid Waste Franchise Oversight 0.01
Departmental Training 0.14
Technology 0.02
Departmental/Project Support 0.01
Sub-Total Day-to-Day Duties - CM 3.48
Program Registration 0.01
Camps 0.74
Recreation Classes and Programs Management 0.47
City Manager & Council Meetings 0.03
Facility Management 0.36
Instructor/Staff/Public/Customer Meetings 0.10
Special Events 0.60
Park Management 0.17
City Safety Program Oversight -
Public Outreach 0.08
Training 0.05
Other Responsibilities 0.01
Sub-Total Day-to-Day Duties - REC 2.63
Representation at Regional Meetings and Coordination with Outside Groups 0.03 Department Name: City Managers
Regional Representation
Day-to-Day Responsibilities (REC)
CM & REC Office-Day-to-Day 2023
Day to Day Activities
Department Name: City Managers
Rotary/Health Action Committee/CPRS/Other Outside Groups 0.10 Sub-Total Regional Representation 0.13
Holidays/Sick/Vacation 0.95
Sub-Total Day-to-Day Before Projects 7.19
Budgeted Effective FTE 7.20
Propopsed FTE 7.20
Remaining FTE Before Projects 0.01
Paid Time Off
CM & REC Office-Day-to-Day 2023
Day to Day Activities
Effective FTE
Day-to-Day Duties
Accounting 0.72
Accounts Payable 0.58
Accounts Receivables and Revenue 0.31
Admin Services Activities 0.37
All Staff Meetings 0.01
Auditing 0.14
Backflow 0.02
Banking and Investments 0.26
Budget and Develop Financial Plans 0.14
Cannabis Permitting 0.02
Council Meetings 0.03
Customer Service 0.05
Provide Support for Operating Departments 0.29
Emergency Response 0.06
Financial Reporting 0.10
Labor Various 0.03
Miscellaneous 0.02
Incode Maintenance 0.41
Payroll 0.22
Purchasing 0.02
Staff Meetings 0.09
Technology and Phone 0.08
Training 0.09
Utility Billing 0.33
Sub-Total Day-to-Day 4.37
California Society of Municipal Finance Officers (CSMFO) 0.01 County Oversight -
Sub-Total Regional Representation 0.01
Holidays/Sick/Vacation 0.81
Sub-Total Day-to-Day Before Projects 5.19
Budgeted FTE 5.50
Propopsed FTE 5.50
Remaining FTE Before Projects 0.31
Department Name: Administrative Services
Regional Representation
Paid Time Off
Admin Services-Day-To-Day 2023
Day to Day Activities
Effective FTE
Day-to-Day Duties
Economic Development 0.02
Administration 0.63
Budget 0.01
Building 0.51
Cannabis Permitting 0.01
Code Enforcement 0.08
Committee/Commission/Council 0.08
Customer Service 0.45
Grants 0.00
Housing 0.35
Long Range Planning 0.03
Meetings 0.24
Plan Check/Permitting 0.03
Project Review-Entitlement 0.00
Reporting 0.03
Training 0.23
Encroachment Permits 0.01
Development Projects 0.34
Sub-Total Day-to-Day Duties 3.03
Regional Representation
Regional Planning Representation 0.07
Sub-Total Regional Representation 0.07
Paid Time Off
Holidays/Sick/Vacation 0.58
Sub-Total Day-to-Day Before Projects 3.68
Budgeted FTE 4.50
Propopsed FTE 4.50
Remaining FTE Before Projects 0.82
Department Name: Community Development
Community Dev-Day-To-Day
Day to Day Activities
Effective FTE
Day-to-Day Duties
ENGINEERING
Strategic Planning 0.01
Budgets 0.01
Building Permit Review 0.00
Customer Support 0.01
Encroachment Permits 0.16
Engineering Standards 0.02
General Admin 0.21
Project Management 0.10
Project Oversight 0.03
Records Management 0.12
Safety 0.04
Staff Meetings 0.08
0.81 STREETS
Customer Support 0.00
Emergency Response 0.00
Event Assistance 0.12
General Admin 0.01
Maintenance 1.24
Regional Meetings/Coordination 0.02
USA Markouts 0.14
Vehicle Maintenance 0.10
Landscaping and Lighting District Management 0.09
Accident Repairs 0.02
1.74 BUILDINGS
Maintenance 0.30
0.30 STORMWATER
Customer Support 0.00
Emergency Response 0.00
Maintenance 0.46
MS4 0.03
0.50 PARKS
Customer Support 0.00
Emergency Response 0.00
Landscape Maintenance Services 0.23
Veronda-Falletti-O&M 0.01
0.25 WATER
Backflow Program 0.00
Customer Service 0.00
Department Name: Public Works
Public Works-Day-To-Day
Day to Day Activities
Department Name: Public Works
Emergency Response 0.00
Maintenance 1.44
Regional Meetings/Coordination 0.06
Regulatory Requirements 0.06
Water Conservation 0.02
1.59 SEWER
Regional Meetings/Coordination 0.01
Customer Service 0.00
Emergency Response 0.00
Flushing/Cleaning 0.03
Maintenance 0.15
0.19 OTHER
All Staff Meetings 0.02
0.02 Paid Time Off
Holidays/Sick/Vacation 1.04
Sub-Total Day-to-Day Before Projects 6.44
Budgeted FTE 8.50
Propopsed FTE 8.50
Remaining FTE Before Projects 2.06
Public Works-Day-To-Day
Day to Day Activities
Effective FTE
ABC Grant 0.05
Administration 1.15
Administration-Chief & Lieutenant 0.58
Alarm Permits 0.05
All Staff Meetings 0.04
Budget/Strategic Planning 0.03
Cannabis Permitting 0.09
Citations 0.16
Community Outreach/Meetings 0.04
Court 0.06
Discovery 0.08
DOJ Reporting 0.04
Emergency Response 0.01
Evidence 0.00
Field Training Officer 0.46
Fleet/Equipment Maintenance 0.09
General Dispatching 3.85
HR/Miscellaneous-Personnel 0.08
Investigation 0.60
K-9 Training 0.05
Late Arrest 0.03
Late Detail 0.03
Livescan 0.01
Media 0.04
Media Log 0.00
Meetings-Council Meetings 0.04
Meetings-Staff Meetings 0.06
Mutual Aid 0.01
Office Duty 0.34
Patrol 6.71
Police Academy Trainee 0.39
Probation Sweep 0.00
Public Records Act Request 0.02
Records-General 0.85
Records-Warrants 0.02
Report Writing 0.05
Scheduling 0.01
Shift Coverage 0.78
SONCATT Grant 0.02
Special Enforcement 0.02
Training/Training Management 0.70
Sub-Total Day-to-Day Duties 17.66
Regional Planning Representation 0.07
Department Name: Police Department
Regional Representation
Day-to-Day Duties
Police Department-Day-To-Day
Day to Day Activities
Department Name: Police Department
Sub-Total Regional Representation 0.07
Holidays/Sick/Vacation 1.86
Sub-Total Day-to-Day Before Projects 19.59
Budgeted FTE 22.90
Propopsed FTE 22.90
Remaining FTE Before Projects 3.31
Paid Time Off
Police Department-Day-To-Day
City of Cotati Strategic Priorities Work Plan 2024-2025 = Proposed New Projects for 2024/25
= Adopted Projects for FY 2023/24 Priority Strategic Projects Long-Term Vitality Address Climate Change Best-in Class Services Community Engagement Equity and Diversity Status % Complete
at End of FY
23-24
Estimated
Completion Estimated FTE
City Managers Office
Putnam, Civic & Sunflower Park Preliminary Design X X X Complete 100% - Personnel Rules Update X X Complete 100% -
CPOA/CPMA Negotiations X X Complete 100% -
5 Records Digitization & Management Project X On Going 25% Summer 2025 0.10 6 Veronda Falletti Barn Preliminary Design X X X In-Progress 5% Fall 2024 0.04 Continued Implementation of Equity Projects X X Complete 100% - 7 Dogs in Parks Ordinance Update X X On Hold 0% Fall 2024 0.02 Improve FIGR Coordination X X Complete 100% -
Update Public Safety Messaging Procedures X X X Complete 100% - Update Community Survey on Equity X X X Complete 100% - 2 Economic Development (Hotel, Cannabis Lounge in FY 23-24) X In-Progress 25% Continous 0.04 5 Emergency Operations Update X X On Hold 0% Summer 2025 0.06 8 Joint Procurement Coordination/Policy Update X On Going 25% Summer 2025 0.02 2 Coordinate on Feasibility of Joint Housing JPA/Bond X X X In-Progress 25% Fall 2024 0.04 Countywide Broadband Improvement Evaluation X X X Complete 100% - Dark Sky Lighting Ordinance X On Hold 0% Fall 2024 0.04 Discussion on Police Oversight Models X X X Complete 100% - Regonition Policy and Proclamation Calendar X X Complete 100% - Council Chamber Audio Visual System Design Update X X Complete 100% - Land Acknoledgment and City Council Rules Update X X Complete 100% - Putnam, Civic Park Baseball Field Renovations/License X X X Complete 100% - Isreali-Palestinian Ceasefire Resolution X X Complete 100% - Veronda Falletti Ranch License Agreement Revisions/Compost Hub X X X Complete 100% - EVITP Electric Vehicle Charging Ordinance X Complete 100% - Community Survey and Recruitment for Police Chief X X X Complete 100% - Negotiation and Purchase of 120 East Cotati Avenue X X X Complete 100% - Investigate Library Options for Cotati X On Going 20% Summer 2025 0.02 Strategic Goals 2023/24
Priority Strategic Projects Long-Term Vitality Address Climate Change Best-in Class Services Community Engagement Equity and Diversity Status % Complete
at End of FY
23-24
Estimated
Completion Estimated FTE
City Managers Office
Strategic Goals 2023/24
Mobile Home Park Senior Overlay Urgency Ordinance X X Complete 100% - City Council Term Limits Discussion X Complete 100% -
Legislative System Migration to PrimeGov X Complete 100% - 4 Evaluate Gas Water Heater w/ Heat Pump Replacements X X In-Progress 75% Fall 2024 0.01 La Plaza Level 3 EV Charger Design/License Agreement X X X Complete 100% - 4 Evaluate City Hall Complex & Corp Yard Microgrid X X X In-Progress 50% Fall 2024 0.02 Noise Ordinance Update X Complete 100% -
5 Develop Policy on Gen. Artifical Intelligence (AI), AI Pilot X New - 0.02 3 Impact Fee Schedule Update for CPI, Legal Updates X New - 0.04 3 1-Year Evaluation of Veterans Hall Leasing Arrangement New 0.03 1 Implement Police Oversight Recommendation X X X New - 0.08 4 Construct Council Chamber Audio Visual Upgrades X X New - 0.04 7 Ordinance to Update Parks/Event Approvals Requirement X X New - 0.02 3 Chamber of Commerce Services Agreement X New - 0.01
2 Economic Development (Cannabis, Industrial Area, Brokers) X X New - 0.04 Proposed FTE 0.66
Note: Project in red text were added during the fiscal year. Available FTE 0.01 -0.66
City of Cotati Strategic Priorities Work Plan 2024-2025 = Proposed New Projects for 2024/25
= Adopted Projects for FY 2023/24 Priority Strategic Projects Long-Term Vitality Address Climate Change Best-in Class Services Community Engagement Equity and Diversity Status % Complete
at End of FY
23-24
Estimated
Completion Estimated FTE
Administrative Services
1 Website Dept. Page Update/New Social Media Content X In Process 15% Winter 2024 0.06 2 Water and Sewer Rate Review and Revenue Evaluations X X X On-Going 5% Fall 2024 - 4 Audio Video It Systems Update (Support & Coordination with IT) On-Going 5% Summer 2025 - 5 IT Infrastructure Update X X On-Going 15% Summer 2025 0.09 9 Business Licensing Audits/Process & System Review X On-Going 20% Summer 2025 0.18 12 IBS Payroll System Updates X In Process 10% Summer 2025 - 13 Deposit Account Process Review X In Process 5% Winter 2024 0.05 Monthly Utility Billing X X Complete 100% -
Backflow Program/Code Update X Complete 100% -
Fixed Asset/Work Order Processes (Support) X Complete 100% - Hydrant Meter Process Update/Software Integration and Rollout X Complete 100% - TOT Taxation Process/Documentation X Complete 100% -
Policy to Address Fiscal Deficits X Complete 100% -
K-9 Licensing -Move to DocuPet W/Rohnert Park X Complete 100% - Financial Deficit Policy X X X Complete 100% -
Veterans Building Billing Management X X Complete 100% - 3 Confidential File Retention Review X New - 0.08
6 Technology and AI Policy X New - 0.09
7 Cyber Security Management X New - 0.05
8 New City Customer Newsletter (Multi-lingual) X X X New - 0.02 10 365 System Tools Implementation X X New - 0.09
11 Process Digitization and Automation - Paper Elimination X X New - 0.37 Proposed FTE 1.08
Note: Project in red text were added during the fiscal year. Available FTE 0.31 -0.77
Strategic Goals 2023/24
City of Cotati Strategic Priorities Work Plan 2024-2025 = Proposed New Projects for 2024/25
= Adopted Projects for FY 2023/24 Priority Strategic Projects Long-Term Vitality Address Climate Change Best-in Class Services Community Engagement Equity and Diversity Status % Complete
at End of FY
23-24
Estimated
Completion Estimated FTE
Community Development
Santero Way Specific Plan Update X X In-Progress 25% Fall 2024 0.12 Active Transportation Plan X X X Complete 100% -
Development of Housing Administration Program X X Complete 100% - Update All Planning Permit Applications X Complete 100% - Plex Housing Design Guidelines X X X Complete 100% -
Proactive Re-Zoning of PD Districts (Housing Element Program 2-7) X X X Complete 100% - General Plan Safety Element X X On Hold 0% -
Post-Covid Economic Development Plan X On Hold 0% -
Housing Element Program Implementation* X X X In-Progress 50% Unknown 0.00 Senior Mobile Home Park Zoning Overlay X X X Complete 100% - 120 E. Cotati Avenue Purchase Engagement with Developers X X X Complete 100% - Housing Element Program 1-6 MHP Ownership Support X X X Complete 100% - Housing Element Program 1-8 Residential Decarbonization (EV Charging) Ordinance X X Complete 100% -
Housing Element Program 2-2 SB 35 & SB 330 Application Process X X Complete 100% - Housing Element Program 2-3 Creation of ADU Information Page X X X Complete 100% - Housing Element Program 2-7 Support for Proposed Residential Projects X X X Complete 100% - Housing Element Program 5-3 Host Housing Fair X X X Complete 100% - $70,000 REAP Grant Close Out X Complete 100% -
ADU Rental Rate Survey Create and Implement X Complete 100% - Solar App + Software Implementation X Complete 100% -
Plant-a-Tree Cotati Program Creation and Implementation X Complete 100% - Creation of a Sustainability Program and Information Webpage X Complete 100% - 2 Housing Legislation Implementation X X X New 0% 0.25
1 Housing Element Program Implementation* X X X X X New 0% 1.00 1 120 E. Cotati Avenue Re-Entitlement/Development X X New 0% 0.12 1 Update City Fees Consistent with AB 602 X New 0% 0.06 Strategic Goals 2023/24
Priority Strategic Projects Long-Term Vitality Address Climate Change Best-in Class Services Community Engagement Equity and Diversity Status % Complete
at End of FY
23-24
Estimated
Completion Estimated FTE
Community Development
Strategic Goals 2023/24
2 Support CM Office Decarbonization Efforts X New 0% 0.12 1 Complete Santero Way Specific Plan Update X X X X X New 0% 0.12 3 MHP Ordinance Updates X X X New 0% 0.05
1 Full Electronic File Management Transition X New 0% 0.12 2 Code Efficiency Improvements X New 0% 0.14
3 General Plan Update X X X X X New 0% 0.35
Proposed FTE 2.43
Note: Project in red text were added during the fiscal year. Available FTE 0.82 * Housing Element Implemntation is subject individual programs within the plan which extends to 2030. -1.61
City of Cotati Strategic Priorities Work Plan 2024-2025 = Proposed New Projects for 2024/25
= Adopted Projects for FY 2023/24 Priority Strategic Projects Long-Term Vitality Address Climate Change Best-in Class Services Community Engagement Equity and Diversity Status % Complete
at End of FY
23-24
Estimated
Completion
Estimated FTE
to complete
Public Works
1 Park and Ride Replacement X X In-Progress 50% Winter 24/25 0.06 Parks Kotate Park Improvements X Complete 100% -
Streets 2024 Street Preservation X X Complete 100% -
2 Parks Putnam Park Design & Improvements X In-Progress 10% Winter 24/25 0.10 2 Sunflower Park Design & Improvements X In-Progress 5% Summer 2025 0.08 1 Streets Gateway Signage X In-Progress 70% Fall 2024 0.02 2 Parks Veronda Falletti Ranch Barn(s) X X In-Progress 5% Summer 2025 0.15 3 Buildings Civic Center Parking Lot Improvements X On Hold 0% TBD 0.02 3 Streets Annual Bicycle Pedestrian Safety Improvements Project X X X On-Going 100% - 1 Grants Hwy 116/West Cotati Ave Intersection Safety Improvements X X X In-Progress 35% Fall 2028 0.20 1 Grants Redwood Drive and Cypress Avenue Pavement Rehabilitation X X In-Progress 25% Winter 24/25 0.06 1 Grants Wastewater System Emergency Generator Project X X On Hold 10% TBD 0.02 1 Grants Sidewalk Gap Closures X X X In-Progress 10% Winter 24/25 0.06 Water "Water ATM" Project X X Complete 100% -
Sewer Cypress Avenue Sewer Repairs X X Complete 100% -
1 Engineering Asset Management, Unified Request Tracking X X In-Progress 25% Winter 24/25 0.20 1 Sewer SCADA Replacement - Sewer X In-Progress 10% Winter 24/25 0.20 1 Water SCADA Replacement - Water X In-Progress 10% Winter 24/25 0.20 3 Park Meadows Landscape Improvements Project X X In-Progress 10% TBD - 2 Well 1A/Well 3 Treatment Renewal and Replacement X On Hold 0% Winter 24/25 0.06 Henry Street Storm Drain Repair X Complete 100% -
3 Utility Box Artwork X In-Progress 50% Winter 24/25 -
2 2025 Street Improvements Project X X New 0% 0.00
2 Civic Center Park Improvements Project X New 0% 0.08
2 Class 1 Pathway Maintenance Project X New 0% 0.03
1 West Sierra Tank Recoating X New 0% 0.10
3 Vegetative Management - Laguna De Santa Rosa New 0% 0.10 3 Microgrid City Hall Complex & Corp Yard (TBD) X X X New 0% 0.10 Proposed FTE 1.84
Strategic Goals 2023/24
Priority Strategic Projects Long-Term Vitality Address Climate Change Best-in Class Services Community Engagement Equity and Diversity Status % Complete
at End of FY
23-24
Estimated
Completion
Estimated FTE
to complete
Public Works
Strategic Goals 2023/24
Note: Project in red text were added during the fiscal year. Available FTE 2.06 Priority Legend 0.22
1 Under construction, and/or grant funded. Or critical for system reliability. 2 Design, public workshops underway. CIP.
3 Discretionary. Quality of life.
City of Cotati Strategic Priorities WorkPlan 2024-2025
= Proposed New Projects for 2024/25
= Adopted Projects for FY 2023/24 Priority Strategic Projects Long-Term Vitality Address Climate Change Best-in Class Services Community Engagement Equity and Diversity Status % Complete
at End of FY
23-24
Estimated
Completion Estimated FTE
Police Department
1 Police Officer Recruiting with Focus on Equity and Inclusion X X On-Going 90% Spring 2024 0.12 2 Return Supervision 1 LT 2SGTs 2 Corporals X X On-Going 80% Fall 2024 0.25 3 Community Outreach TPA, NNO, Coffee with a Cop X X On-Going 75% Winter 2024 0.06 4 Social Media X X On-Going 20% Spring 2025 0.25
5 Crisis Intervention Training All Staff X X On-Going 80% Winter 2024 0.06 6 Full Deployment of BOLA Wrap X Complete 50% Summer 2024 0.04 7 PSAP (Dispatch) Upgrade X On-Going 30% Spring 2025 0.19 8 Vehicle, Pedestrian, Bicycle Safety/Enforcement X X On-Going 60% Winter 2024 0.17 Continued De-Escalation Tactics and Implicit Bias Training X X Complete 100% 0.00 Patrol Electric Vehicle Deployment X Complete 100% 0.00 Dispatch Support FTE X Complete 100% 0.00
EV Cameras integrated with Axon Cloud Storage X Complete 100% 0.00 K9 Replacement (Scent Tracking Dog) X Complete 100% 0.00 Hi-Lo Evacuation Drill X Complete 100% 0.00
Mid-Year Police Report X Complete 100% 0.00
Annual Police Report X Complete 100% 0.00
SSU Police Internship X X Complete 100% 0.00
1 Implement Police Oversight Recommendation X X X New 0% 0.17 2 Implicit Bias and Racial Profiling Training X X X New 0% 0.24 3 Small Agency Mutual Aid Investigation Team Training X New 0% 0.26 4 Records, PRA, & Analytics Training X New 0% 0.12
5 Industrial Area Restricted Hour Parking Ordinance X X X New 0% 0.08 6 Mobile Support Team & SAFE Crisis/Mental Health Training X X New 0% 0.24 7 Wellness Grant Equipment X X New 0% 0.04
8 SB2 Training and Compliance X X New 0% 0.05
9 Social Media Enhancement & Outreach X X New 0% 0.12
10 Evaluate "Lights On!" Project X New 0% 0.12
11 Repurpose Holding Facility Infrastructure X X New 0% 0.50 Strategic Goals 2023/24
Priority Strategic Projects Long-Term Vitality Address Climate Change Best-in Class Services Community Engagement Equity and Diversity Status % Complete
at End of FY
23-24
Estimated
Completion Estimated FTE
Police Department
Strategic Goals 2023/24
Proposed FTE 3.07
Note: Project in red text were added during the fiscal year. Available FTE 3.31
0.24 Cotati City Council
Agenda Staff Report
Item type: REGULAR AGENDA (ACTION)
To: City Council
Subject: DISCUSSION ON BI-ANNUAL BUDGETING FOR THE
PERIOD OF FY 2025/26 - FY 2026/27
Date: February 20, 2024
Written by: Damien O'Bid, City Manager
Recommendation
It is recommended that the City Council discuss the staff recommended shift to a two-year budget for fiscal years 2025/26 – 2026/27, provide feedback to staff on this recommendation, as well as what additional materials or planning meetings the City Council would like to see if the City transitioned to a two-year budget. No changes are proposed to the planned fiscal year 2024/25 budget.
Background
In Sonoma County, several cities currently adopt two-year budgets, including the Town of Windsor, City of Healdsburg and City of Cloverdale. There are examples of other cities in surrounding counties also budget on a two year cycle. Currently, the City of Cotati and the cities of Santa Rosa, Petaluma, Rohnert Park, Sebastopol and Sonoma adopt single year budgets.
During the fiscal year 2023/24 budget development process, staff initially broached the potential for a two-year budget with the City Council. At that time, initial feedback was that the City Council would need more in-depth study sessions and potentially additional information to be comfortable budgeting on a two year cycle.
Analysis/Discussion
Essentially, two-year budgets function like an extended single year budget, except that the ”midyear” adjustment that we currently do would be more robust and occur at the end of the first year.
Commonly cited advantages of biennial budgets include:
• Reducing the total amount of time spent budgeting over a two-year period and freeing up time for other projects in year two,
• Encouraging the jurisdiction to think strategically over multiple years instead of just balancing the budget for a single year, and
• For cities in particular, de-politicizing the budget somewhat because under state law cities may only adopt biennial budgets in even-numbered (non-election) years.
Commonly cited disadvantages include:
• More time and effort required to develop the budget in year one, • A perceived loss of control by the legislative body, since they are approving the budget for two years at a time,
• More difficulty and uncertainty forecasting revenues/expenditures further into the future, and
• Some jurisdictions spending too much time on budget amendments or the mid-biennium review and adjustment, eliminating any time savings in year two.
If the City were to transition to a two-year budget, the proposed budget process would be similar to what is outlined for Santa Monica here (https://finance.smgov.net/about/fiscal-policies) Attached is whitepaper from the former Finance Director of San Luis Obispo, which summarizes the benefits from his experience.
Financial Considerations
This is a preliminary discussion only, so there are no direct financial impacts. If a two year budget were implemented, there would likely be additional staff time required to produce the two year budget, which would be expected to be offset by staff savings every other year.
Environmental Issues
Not Applicable.
Multi-Year Budgeting
The following is based on a “white paper” I prepared when I was the Director of Finance & Information Technology for the City of San Luis Obispo from 1988 to 2010.
The City of San Luis Obispo prepared its first two year Financial Plan in 1983, and it has continued to use it as one of its core tools for planning and budget-making ever since.
The purpose of this “white paper” is to summarize almost thirty years of experience with this approach, including: What are the benefits of multi-year budgets? What are the potential downsides? What are some of the underlying concepts that need to be in place in order to realize these benefits? What should other cities consider in moving to a multi-year budget? And lastly, why does this work for the City of San Luis Obispo?
What are the benefits of multi-year budgets?
The goals identified when the City's first two-year plan was prepared almost thirty years ago continue to be realized:
• Integrate goal-setting and budgetary process.
• Reinforce the commitment to long-term fiscal health by looking beyond a one-year time horizon in our ability to fund operating programs and capital improvements. • Promote more “orderly spending patterns” – in other words, mitigate against the “use it or lose it” mentality.
• Retain the fiscal control provided by annual budgets. • Save time and effort in preparing annual budgets.
The following further discusses the key benefits in using a multi-year approach to budgeting:
Linking Goals and Resources. The key to understanding why the City has remained committed to using multi-year budgets is understanding what we believe is the fundamental purpose of the budget process:
124 Cerro Romauldo Avenue
San Luis Obispo, CA 93405
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William C. Statler
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Multi-Year Budgeting Page 2
Linking what we want to accomplish for the community with the resources necessary to do so.
This means viewing the budgetary process as the primary tool available to the City in identifying the most important things for us to accomplish, and then ensuring that the budget allocates the resources necessary to achieve them.
Accordingly, the City’s budget process includes early Council involvement in setting major City goals and priorities as the first major step in preparing the two-year Financial Plan.
Although the specifics vary from year to year, a special Council goal-setting workshop is held at the beginning of the Financial Plan preparation process. Significant staff work does not begin on the budget until after this workshop is completed and the Council has agreed upon the most important, highest priority things for the City to accomplish over the next two years.
The resulting budget instructions from the City Manager to staff in preparing their departmental budgets direct that funding be included in their submittals to accomplish these Council goals. (Discussing the mechanics of how this process works is a topic in itself for another “white paper!”)
In addition to identifying major City-wide goals as developed by the Council, the City's Financial Plan also includes comprehensive mission, goal and objective statements for each of the City’s 70-plus operating programs along with a full description of program activities.
This planning process occurs within a comprehensive framework of adopted fiscal policies covering a wide range of issues including revenue management, user fee cost recovery goals, enterprise fund fees and rates, investments, capital financing and debt management, productivity, contracting for services, human resources management, fund balance/working capital levels and capital improvement management.
In summary, the City’s budget is intended to focus on the key questions of what we do and why, not just how much does it cost and how will it be funded.
In this context, multi-year budgeting makes a great deal of sense. Very few goals and objectives fit into neat one-year increments. As such, a multi-year approach enables the City to better set meaningful objectives with realistic timeframes for completing them. In reflecting this focus on planning and budgeting for accomplishments, the City issues formal reports on an ongoing basis on the status of major goals, objectives and CIP projects as well as issuing interim financial reports.
Mitigating the “Use It or Lose It” Mentality. In addition to reinforcing the City's planning efforts, a multi-year approach also provides for more “structured operations” and “orderly spending patterns.” This is a policy euphemism for mitigating the “use it or lose it” mentality that can often exist in managing operating budgets.
Under the City’s two-year approach, unspent operating appropriations can be carried over in their entirety into the second year. It isn’t automatic—approval by the City Manager is required—but it does offer departments the opportunity to fund worthwhile activities or projects with their operating savings, and to ensure that carry-over funding is available for multi-year objectives and operating activities.
Multi-Year Budgeting Page 3
Retaining Fiscal Control. A two-year budget can mean significantly different things to different organizations. In some cities, a two-year budget means adopting a single number that encompasses the entire two-year period, with the operating departments then responsible for allocating their expenditures as they believe appropriate over the two-year period. With this approach, for example, a two year appropriation of $1 million could have expenditures of $700,000 the first year and $300,000 in the second year as determined by the operating department. Another approach is to formally adopt annual budgets for both fiscal years at the same time.
In the City’s case, it prepares a Financial Plan that provides for two years of operations along with a four-year capital improvement plan. Under this approach, appropriations continue to be made annually; however, the Financial Plan is the foundation for preparing the budget for the second year. Additionally, as noted above, unexpended operating appropriations from the first year may be carried over for specific purposes into the second year with the approval of the City Manager.
As discussed in greater detail below, the City devotes as much financial and policy attention to the second year of our two-year Financial Plan as the first. This means the budget must balance and make as much fiscal sense in the second year as it does in the first for both operations and capital improvements.
For example, in preparing the 2007-09 Financial Plan, we developed revenue, expenditure (operating, capital and debt service) and changes in fund balance/working capital schedules for both 2007-08 and 2008-09 for all of our funds; and applied our “balanced budget” and minimum fund balance policies to both fiscal years.
It’s important to note that the second year of our Financial Plan is not a “wish list:” the City does not include any new programs, personnel or CIP projects in the second year unless it is fully committed to implementing them and to making any revenue adjustments that may be necessary to fund them.
Similar in concept to a mid-year budget review, the second year is used as an opportunity to adjust the Financial Plan as necessary, but it is not intended to be a fundamental reevaluation of our major goals and plans for the balance of the two-year period.
Saving Time and Resources in Preparing the Budget. If the City’s approach to budget preparation was primarily a number-crunching exercise, these savings would probably not be significant. However, because of its commitment to using the budget process as a major planning and goal-setting opportunity, the savings with a two-year approach are significant.
Preparing the initial two-year Financial Plan document is an extensive, time-consuming process that involves virtually everyone in the organization, including Council advisory bodies. All of the City’s program goals and activities are revisited at this time, and departmental objectives are developed along with Council goals.
Some effort comparisons: preparing the 2005-07 Financial Plan took eleven months and twelve Council workshops, study sessions and public hearings to complete, and resulted in a 402 page document (and two major appendices totaling 516 pages); adopting the 2006-07 budget (second year of the 2005-07 Financial Plan) required just one regular Council meeting (and was considered as just one of many items) and resulted in a 165 page “supplement” document (including supporting documentation).
Multi-Year Budgeting Page 4
Maintaining Fiscal Health. Lastly, multi-year budgeting reflects a fundamental commitment to fiscal health by outlining the financial challenges facing the City—not just this year, but in the foreseeable future; and then initiating the next step of developing—and implementing—solutions in meeting these challenges.
Does this mean economic stability is a necessary pre-condition for a realistic multi-year budget?
Before we entered into the very difficult economic environment of the early and mid-1990’s— which in California was compounded by hard-hitting cuts by the State to all levels of local government as it struggled with its own very serious budget problems—I would have answered yes to this question.
However, based on the City’s experience in putting together the 1993-95 Financial Plan, I believe that taking a multi-year approach is just as important in difficult years as it is in the “good ones.” And this belief was reinforced by the very tough budget process we went through in preparing the 2003-05 and 2005-07 Financial Plans.
In the City’s case, it assists in making realistic—though tough—decisions about what we can reasonably afford to do in the long run, and eliminates most one-time fixes and “smoke and mirror” approaches to balancing the budget.
In fact, because we knew 1993-95 would be an extremely difficult period for us financially, starting with that Financial Plan, we have extended our forecast period to five years in developing our basic budget balancing strategies in order to ensure that we are in fact making budget decisions that make sense for the foreseeable future. And this longer-term approach was also invaluable in preparing both the 2003-05 and 2005-07 Financial Plans.
Important in the “good times,” too. Taking a multi-year approach was also important in preparing the 2007-09 Financial Plan, which reflected a significant improvement in the City’s fiscal outlook. (This was largely due to the approval of Measure Y, a ½-cent general purpose City sales tax approved overwhelmingly approved by the voters in November 2006.) Stated simply, most cities do not get into financial trouble in bad times: the roots most often take hold in the “good times.” In preparing the 2007-09 Financial Plan, we worked hard to respond to current community priorities on one hand, while ensuring that the budget made sense for the long run as well. Taking a multi-year approach was a key tool in providing this assurance.
Does this mean making assumptions about the future that may become obsolete before the laser jet ink is even dry? Yes. (Although there are strategies for minimizing this—but this is also the subject of another “white paper.”) And isn’t there a lot of risk with using this approach? Perhaps.
But what is the alternative if you’re serious about assuring your city’s long-term fiscal health? Without some idea of the problems you're trying to solve, it is very difficult (if not impossible) to find the right solutions.
Importance of a commitment to a planning approach. What is probably more important than economic stability in making our approach to multi-year budgeting work is some level of political stability. This doesn’t mean stability in a policy “agenda” sense, but stability in the commitment by elected officials to using the budget process as a meaningful planning and financial Multi-Year Budgeting Page 5
programming tool. This concern was reflected back when a two-year budget process was first considered by our “pioneers” in their deliberations about what two-year period should be selected:
• The one that immediately follows a Council election?
• Or the one that follows a year later?
In support of the first option is the argument that new Council members should be able to immediately affect City plans, policies and goals for the next two years; in support of the second option is the argument that Council members will be more effective in implementing changes after they are more experienced as Council members and more familiar with city operations.
Because of changes in our election dates since the two year approach was first adopted, we’ve had the opportunity to experience both situations in preparing our two year Financial Plan. The ultimate conclusion? It probably doesn’t matter which two-year period you select if the Council is genuinely committed to a policy-based, planning-oriented budget process. (However, there will be more staff work involved in helping new Council members prepare for their first two-year budget, especially if there are three new members, which is possible with the City’s staggered terms and term limits.)
Lessons learned—what should you consider in moving to a two-year budget? Based on our experience, I think the most important first step for any city that is seriously considering moving towards a two-year budget is to clearly think through the following:
• Most fundamentally, what do you hope to accomplish if you adopt this approach? • What is your current organizational culture in terms of departmental versus centralized control of the budget? Is this something you want to change? • Is integrating strategic planning and the budget process a high priority? Do you have a process for this now, and will a multi-year approach improve it? Once the goals of moving to a two-year budget are identified and agreed upon, the “mechanics” of how to put it together and administer it will follow by simply asking: does this procedure help or hinder accomplishing our goals?
Specifics developed in San Luis Obispo in meeting our goals include:
• Planning. We begin the two-year process with Council goal-setting. Their agreed-upon priorities are incorporated into the preliminary budget preparation by the staff. By using a two-year timeframe, we are able to establish reasonable schedules for achieving these goals. • Fiscal Health. We review budget requests and prepare annual operating and capital budgets for both years with equal levels of care and specificity, and make budget decisions based on our financial condition at the end of the second year—not just the first year—of the budget timeframe. And the City doesn’t create “phantom” budget balancing items or defer tough decisions to the second year: any needed expenditure cuts or new revenues have to be real and specified. If an increase in taxes or fees is required to balance the budget, Council approval of the ordinance or resolution implementing this is an integral part of the budget adoption process.
Multi-Year Budgeting Page 6
• Fiscal Control. The City retains the concept of annual budgets; we do not adopt a single “two-year” number without regard as to which fiscal year there is departmental spending authority. Equally important, we develop revenue and fund balance projections for each fiscal year, and the results must be consistent with adopted fiscal policies.
For example, annual operating expenditures should not exceed operating revenues; and ending fund balance should be at least 20% of operating expenditures. • Spending Patterns. Although the City retains the concept of annual budgets, operating budget savings in the first year are available for carry-over into the second year. However, programming these amounts back into departmental budgets requires City Manager approval.
As noted above, it’s not “automatic” (we have developed specific guidelines on how balances are carried-over), but it does provide operating departments with additional funding flexibility using their prior year savings. At the end of the second year, all operating appropriations lapse.
• Time and Effort. As discussed above, the City has experienced significant savings in preparing the second year of our two-year document, but virtually all of these savings are attributable to what we want our two-year Financial Plan process to accomplish. The budget for the second year is viewed as a “supplement” to its parent document, and it focuses solely on changes to the adopted Financial Plan; it is not another comprehensive Financial Plan preparation effort.
Summary: Why does this work for us?
Multi-year budgeting works for us because of how we’ve defined the fundamental purpose of our budgetary process:
• Identify the most important things for us to accomplish for our community. • Establish reasonable timeframes and organizational responsibility for achieving them. • Allocate the resources necessary for programs and projects to implement them.
Even though the City annually adopts its budget, it takes the two-year nature of our Financial Plan very seriously. In balancing the budget, we are equally concerned with outcomes in the second year (in fact, perhaps even more so) than with projections for the first year.
At an operational level, it works because departmental staff have confidence that operating savings from the first year will be available in the second; and that there is as much commitment to funding any new programs, projects or staffing in the second year as there is in the first. At an elected official level, I think it works because it provides Council members with an effective framework for accomplishing their goals and policy objectives.
Simply stated, it works because the City believes in—and is committed to—the underlying principles that a multi-year approach supports. Without this commitment, the benefits of multiyear budgeting are probably not there.
When I first came to San Luis Obispo in 1988, I have to admit that I was highly skeptical of the real value of a policy-based, multi-year approach to budgeting and financial planning. At best, I Multi-Year Budgeting Page 7
believed it was “frosting on the cake” of what otherwise needed to be a much more basic, meat and potatoes approach to preparing budgets.
After 22 years and the preparation of eleven Financial Plans, it is difficult for me to envision anything more fundamentally necessary for the well-being of a community than identifying where it wants to go and a budget process designed to help it get there. . . . . . . . . . . . . . . . . . . . . .